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2019 (2) TMI 1060 - AT - Income TaxDisallowance of additional depreciation on new plant & machinery - disallowance of normal depreciation - Held that:- If the AO doubted the installation, he could have obtained the information from the suppliers, details of which were available with him. CIT(A), therefore, held that no evidence has been brought on record to prove that the machines were not installed and put to use. The Order of the A.O. was accordingly set aside and depreciation and additional depreciation was allowed as per Law. No merit in these grounds of departmental appeal. By nature of the assets mentioned above, it clearly shows that these are of such a nature that these can be used even after the purchase. There is no need to get a certification of installation from third party particularly when Plant Manager of the assessee certified that installation have been done of the above assets in manufacturing plant. It, therefore, appears that A.O. without any justification denied depreciation and additional depreciation to the assessee. CIT(A), therefore, rightly allowed the same in favour of the assessee. Disallowance of applying the provisions of Section 40A(2)(a) - charging of interest on the unsecured loans taken from the specified persons u/s 40A(2)(b) - Held that:- No merit in this ground of appeal of Revenue. There is difference between loan taken from Banks and unsecured loans taken from the relatives. In the case of unsecured loans from the relatives, no formalities and bank guarantee shall have to be given. 15% interest paid is highly reasonable. CIT(A) rightly appreciated that the Tribunal in other cases have allowed even much higher rate of interest paid to the relatives. This ground of appeal of Revenue has no merit and the same is accordingly dismissed. Addition on account of payments in violation of provisions of Section 40A(3) - Held that:- Expenses which have been disallowed by the A.O. under section 40A(3). It was found that except two payments others were not in violation of Section 40A(3). The details clearly shows that the amount paid on various accounts were less than limit provided under section 40A(3). CIT(A), therefore, correctly deleted the addition. In the absence of any material contrary to the findings of the CIT(A) on record, no interference is required in the matter. This ground of appeal of Revenue is dismissed.
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