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2019 (5) TMI 1317 - AT - Income TaxDisallowance of interest paid expenses u/s. 36(1)(iii) - Contention of the assessee’s counsel that borrowed funds were not used for the purpose of giving advance and that the advances were given out of reserves and surplus - HELD THAT:- It is evident that the interest bearing funds were used for the purposes of giving advance for non business purposes. Therefore, the disallowance was made by the AO was accordingly rightly confirmed by the CIT(A), which does not need any interference hence, the ground no. 2 is dismissed. Disallowance on account of rent payment - assessee had failed to furnish any documentary evidence with regard to his claim of payment of rent to the 7 persons as recorded in the assessment order - HELD THAT:- No evidence of ownership of the property by these persons was furnished. The assessee had also failed to furnish the copies of lease a agreements. In these circumstances, the genuineness of the claim of deduction pertaining to rent expenditure remained unverified. Even during the course of appellate proceedings, no evidence of ownership of property by the 7 persons to whom the rent was claimed to have been paid was furnished. Out of the 3 persons in whose names the electricity bills were filed only one person figured in the list of 7 persons to whom the rent paid. In the case of remaining 2 persons there was no rent payment. The rent agreement filed by the assessee is in the name of Sh. Kurma whereas no payment has been made to him. From all the aforesaid facts, it is evident that the genuineness of the rent expenses claimed by the assessee has not been established. The disallowance made by the AO on this account was rightly confirmed by the Ld. CIT(A), which does not need any interference on hence, the ground no. 3 is dismissed.
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