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2019 (9) TMI 96 - AT - Income TaxDisallowance u/s 36(1)(iii) - amount of interest paid on bank loan for setting up new stores or stores in which business activities did not commenced in the year under reference - admission of additional evidence - HELD THAT:- The disallowance of interest, admittedly has been made for the reason that the assets /stores for which the loans had been taken and to which the interest related, were not started during the year. The additional documents filed by the assessee by way of Sanction letter of Bank for term loans taken and the utilization certificate of the term loans given to the bank by the assessee, are in support of its claim that interest paid pertained to loans utilized for renovating shops and not acquiring them and in any case the interest paid pertained to period after the asset for which the loans were taken were put to use. - The additional evidences ,we find, therefore, go the root of the matter and are relevant for bringing the correct facts on record - Matter restored before the AO to decide the issue afresh. Depreciation on electrical installations and fittings - 10% OR 15% - HELD THAT:- No reason to interfere in the order of the CIT(A). The factual findings of the CIT(A) made after perusing the details filed by the assessee that the additions made were in the nature of furniture and fittings, have not been controverted by the assessee by way of any explanation or detail filed before us, nor the Ld.Counsel for the assessee was able to point out any discrepancy in the findings of the CIT(A). That the applicable rate of depreciation on the said assets is 10% is not disputed. In view of the same, we find no reason to interfere in the order of the CIT(A) in restricting the depreciation to 10% on electric fittings Accrual of income - Difference in the amount of interest receivable on FDRs on accrual basis and accounted for by the appellant on receipt basis in the books of accounts - HELD THAT:- Undisputedly the income had accrued in the impugned year to the assessee and TDS also deducted on the same. The same has, therefore, been rightly taxed in the impugned year. Expenditure incurred towards rent disallowed - claim pertained to preceding year and disallowance of excess purchases booked - HELD THAT:- Assessee has filed additional evidences before us contradicting the findings of the Revenue. Copy of rent agreement entered into during the year has been filed to show that the impugned expenditure arose on account of the same and thus accrued during the year itself. - there was reasonable cause with the assessee for not producing them before the lower authorities, since as stated by the director of the company on oath, the documents had got misplaced in shifting of the premises of the assessee, which has not been controverted by the Revenue. We therefore admit the additional evidences .Further since the facts as contended by the assessee need to be verified, we restore this issue back to the AO Expenditure incurred on foreign travelling of the Directors - non business expenses - HELD THAT:- though undoubtedly the assessee has not filed any evidence of foreign travel undertaken for the purpose of its business, at the same time, it cannot be completely ruled out that certain amount of expenses is incurred in the course of its business considering the nature of its business dealing in trading of branded clothes/apparels. We, therefore, consider 50% of the amount actually claimed by the assessee as reasonable and disallow the balance 50%. Disallowance u/s 40(a)(ia) - contention of assessee by was that out of the advertisement expenses, the amount paid to Fine Ads of ₹ 26,472/- did not qualify for tax deduction at source since the limit for TDS was ₹ 30,000/- and above and for the professional charges to Noshe Oceanic in fact TDS had been deducted on the impugned payment - HELD THAT:- restore the issue back to the AO to verify both the claims of the assessee vis-à-vis the advertisement payment to Fine Ads not qualifying for TDS deduction and the fact that TDS having been deducted to Noshe Oceanic.The AO is directed to adjudicate the issue in accordance with law after duly verifying the contentions of the assessee. Needless to add, the assessee be granted due opportunity of hearing. Accrual of income - difference in the amounts of receipt as per form No. 26AS and as accounted for in the books of accounts of the appellant - HELD THAT:- Assessee had consistently pleaded that the difference was on account of reimbursement received from M/s V.F. Brands which was booked in the subsequent year when the fact of the reimbursement came to its knowledge by way of credit notes issued. CIT(A), we find, despite specific averments made by the assessee upheld the disallowance by giving general findings that income is to be taxed on accrual basis and that income had accrued to the assessee, without addressing the facts as stated by the assessee and pointing out how he arrived at the finding that income accrued to the assessee in this year. We, therefore, consider it fit to restore the issue back to the AO to consider the contention of the assessee
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