Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (7) TMI 514 - ITAT MUMBAIInterest u/s 36(1)(iii) of the Act - disallowance of motorcar expenses and depreciation on motorcar on ad-hoc basis @ 20% towards personal use – Held that:- The net interest of ₹ 11,38,490, was shown on the credit side of Profit & Loss account - The assessee’s claim of interest of ₹ 5,66,188, paid on overdraft account has been claimed as business expenditure u/s 36(1)(iii) - it is not borne out, whether the fund flow of overdraft account has been examined or not to ascertain, how much overdraft credit has been used for business purpose and how much for the personal user - If the overdraft facility has been used for the purpose of business, then the interest paid has to be allowed under section 36(1)(iii) – thus, the matter is to be remitted back to the AO for examination of the nature of the overdraft account and the fund flow of such account to examine the utilization of overdraft account for the business purpose – Decided in favour of Assessee. As regards the disallowance of motorcar expenditure and depreciation on motorcar, it is seen that the disallowance has been made on account of personal user - the assessee has not been maintaining a log book for his business purpose, therefore, personal element of usage of motorcar cannot be ruled out - disallowance @ 20% is slightly on higher side, thus, the disallowance is restricted on account of motorcar expenses and depreciation @ 10% - Decided partly in favour of Assessee.
|