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2017 (1) TMI 1141 - AT - Income TaxDisallowance of travelling cost - Held that:- The assessee being corporate claimed such travelling expenses in the immediate preceding year for ₹ 1,16,10,992/- but in the year before us it is considerably less. Therefore in the instant case ad hoc disallowance to the extent of ₹ 20,000/- of the total expenses made on probabilities which is in our view not justified as no specific item or instance of personal expenditure was found in the circumstances of the case. We have noted that the fact of expenditure was well established by the self made vouchers but the lower authorities failed to bring any instance on record any unreasonableness in the amount of expenditure and the purpose for which it was incurred whether personal or commercial. On these facts, we see no reasons to make any addition/disallowance of travelling cost. Disallowance of proportionate interest expenditure for the loan given to the directors - Held that:- The assessee has submitted that it has its own funds of ₹ 5,22,90,200.00 as on 31.3.2005. Therefore it is clearly established that the assessee was having its own capital greater than the loans and advances given to the directors. We are, therefore, of the considered view that no addition is warranted Treatment to subsidy received from Government of West Bengal as capital receipt - Held that:- The scheme of the West Bengal Gov. does not an all envisage giving any subsidy in respect of specific items of expenses like sales-tax, power, water, etc. and hence the same cannot be regard to be of revenue nature. Since the assessee has received the financial assistance under the same scheme, in our view, the CIT(A) was justified in following the earlier order of the Tribunal for Treatment to subsidy received from Government of West Bengal as capital receipt Addition on account of excise duty pertaining to finished goods - Held that:- The liability for the payment of the excise duty arises at the time of removal of the goods and in the instant case the finished goods are lying in the closing stock. Therefore there is no question of including the excise duty in the closing stock of the finished goods
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