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2017 (5) TMI 1313 - ITAT DELHIAddition u/s 41 - Held that:- The assessee during the course of the assessment proceedings had filed complete details giving the names and addresses of the creditors to show that not only the liabilities were outstanding but also-that the same were duly acknowledged by the sundry creditors as well. Moreover, a copy of the bank-account of the assessee has also been placed on record out of which all these sundry creditors have been paid through account payee cheques in the following Financial Year. Therefore, the Ld. CIT(A) rightly held that the liabilities in respect of various sundry creditors mentioned above were still outstanding at the end of the Financial Year relevant to the assessment year under consideration and the provisions of section 41(1) were not applicable in the assessee’s case, hence, the addition made by the A.O. on this account was rightly deleted - Decided against revenue Disallowance on account of car running and depreciation - Held that:- Once the assessee can establish bonafide use of the machinery for the purposes of the assessee's business, then and in that event, the assessee establishes the right to claim depreciation. We further note that the assessee has himself admitted that some element of personal use of the cars cannot be ruled out in the absence of logbook and other relevant details. Therefore, some reasonable disallowance on account of personal use of the cars was required to be made. However, disallowance made by the A.O. to the extent of 30% was held to be excessive. Therefore, the disallowance of 20% of the car maintenance and running expenses and depreciation would be reasonable and was rightly confirmed to that extent and accordingly, the disallowance on these accounts was restricted to ₹ 1,03,012/-, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the issue - Decided against revenue Disallowance of Tour and Travelling expenses - Held that:- We note that the disallowance has been made by the A.O. by observing that examination of the vouchers revealed ineligible nature of the expenses to this extent. However, no specific instance of disallowable nature has been pointed out by the A.O. nor has he brought on record any evidence in support of these observations. Therefore, disallowance made on this account was rightly deleted - Decided against revenue
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