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2016 (7) TMI 1178 - AT - Income TaxDisallowance of Interest on borrowings - Held that:- The assessee’s borrowing was for the purposes of business as the same were utilised for advancing security deposit of ₹ 2,00,00,000/- for taking on leave and license basis shop on monthly license fee by the assessee for setting up jewellery outlet as an expansion of the existing business of dealing in gold and diamond jewellery , and interest of ₹ 7,23,050/- incurred on the said borrowings is incurred wholly and exclusively for the purposes of business as per the facts emerging from records, is an allowable revenue expenditure. We therefore order the deletion of addition of ₹ 7,23,000/- made to the income of the assessee by the AO as confirmed by the CIT(A). - Decided in favour of assessee Addition on account of rent - Held that:- The assessee has not made provisions of rent in the books of accounts as per terms of agreement and the issue is also not referred to Courts as per terms in the leave and license agreement , the assessee having coming forward with an explanation that no rent is payable as the licensor has not fulfilled the terms of leave and license agreement by delaying the construction of the layout structure of the shop , but it not conclusive enough to fasten tax liability on the assessee. It was starting point for the authorities below to start an enquiry to prove that payments have been made by the assesssee out of books and to disprove the contentions of the assessee and to fasten the liability on the assessee but no such enquiry has been conducted by the revenue and the assessee has also not brought on record clinching evidences to support and substantiate its contentions. Hence, we are of the considered view based on the facts and circumstances of the case that the matter need to be set aside and restored to the file of the AO for de-novo examination and adjudication of the issue on merits after granting opportunity of being heard to the assessee in accordance with the principles of natural justice and in accordance with law. - Decided in favour of assessee for statistical purposes. Addition on account of expenses such as stamp duty, registration fees and other miscellaneous charges - Held that:- no enquiry has been made by the Revenue and only estimation has been made on ad-hoc basis. The stamp duty charges as appearing in the leave and license agreement being cost of stamp paper are only ₹ 2000/- and the stamp paper was purchased on 28.05.2004 for ₹ 2000/- as per records, no other evidence/details are appearing on record regarding incurring of any further expenses by the assessee and the AO has estimated the same on ad-hoc basis without any working or basis of the same to come to conclusion that the expenses of ₹ 50,000/- are incurred by the assessee. In our considered view suspicion cannot take the place of proof. No enquiry has been conducted by the AO to disprove the contentions of the assessee nor the assessee has brought on record any evidences to support his contention that the expenses have been incurred by the licensor by way of confirmation from licensor etc. In our considered view, the matter need to be set aside and restored to the file of the AO for de-novo examination and adjudication of the issue by the AO - Decided in favour of assessee for statistical purposes.
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