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2019 (9) TMI 1722 - AT - Income TaxDisallowance on account of bank interest expenses - CIT(A) deleted addition - HELD THAT:- As from the perusal of the records it can be seen that the loan procured was utilized by the assessee wholly and exclusively for its business as per clause 14 of the arrangement between third party contract bottling units (CBUs). The working capital is advanced to these CBUs so as to enable them to procure material, undertake manufacturing and maintain stocks and debtors for the assessee. Assessee’s profit earning source is the arrangement with the CBUs wherein the assessee provides working capital to these CBUs to enable them to procure materials and carry out large scale manufacturing of alcoholic beverages and deliver the same to the assessee’s customers on its behalf. Thus, from this it is clear that working capital loan was taken by the assessee for its business purpose and use for business purposes only. CIT(A) was right in deleting this disallowance. Ground No. 1 of the Revenue’s appeal is dismissed. Disallowance on account legal & Professional Fee Expenses and warehousing and demurrage charges - CIT(A) deleted addition - HELD THAT:- As admitted position that during the year there was no business activity, but during the said period the assessee incurred expenses on the maintenance of its business establishment. During the said year, the AO has not pointed out any bogus or expenditure of personal nature, which will warrant any disallowance. CIT(A) rightly held that by simply mentioning that the expenditures are not commensurate with the turnover, will not automatically prove that they have not been incurred wholly and exclusively for business purposes. Thus, there is no need to interfere with the findings of the CIT(A). Ground Nos. 2 and 3 are dismissed.
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