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2022 (11) TMI 1251 - ITAT RAIPURMercedes car gifted - Depreciation on car - capital account credited an amount towards value of a Mercedes Benz Car - Allowable business expenditure - HELD THAT:- No infirmity does emerge from the observation of the A.O who had rightly brought the value of the car to tax u/s. 28(iv) of the Act. Apropos, the assessee’s claim for depreciation on the aforesaid Mercedez Benz car, find that as observed by the A.O as the assessee had not only claimed any depreciation on the said car during the year under consideration, but had in fact claimed the depreciation on the entire value of the same only from A.Y.2014-15, therefore, the said fact establishes beyond doubt that the said vehicle was not being used for business purposes during the year under consideration. Finding no infirmity in the view taken by the A.O who had rightly declined the assessee’s claim for depreciation on the aforesaid Mercedez Benz car as was raised in the course of the assessment proceedings, uphold the same. Thus, the Ground of appeal No.1 raised by the assessee is dismissed in terms of the aforesaid observations. Disallowance u/s 40A(2)(A) of interest charges that were paid by the assessee to her seven family members - AO had while making the aforesaid disallowance resorted to the comparison between the unlikes i.e. comparison between interest rate paid on unsecured loan, as against that paid on loans raised from a bank. As Section 40A(2)(a) of the Act presupposes a comparison between likes on the basis of which it could be gathered that the expenditure booked by the assessee as being excessive or unreasonable, therefore, the very basis leading to the aforesaid disallowance does not find favour for the reason that as in comparison to the loans raised from a bank which involves substantial formalities, hidden charges and offering of collateral securities etc., the raising of unsecured loan from a family member involves neither of such issues. Thus we are unable to concur with the very basis leading to drawing of adverse inference by the lower authorities, and thus, is of the considered view that the matter in all fairness requires to be restored to the file of the A.O, with a direction to re-adjudicate the issue after considering the rates at which unsecured loans at the relevant point of time would be available. Assessee ground allowed for statistical purposes. Difference in the account of MRF Tyres & Industries Ltd. - As the assessee had not only failed to reconcile the aforesaid discrepancy before the lower authorities, but also adopting callous approach had not placed on record anything to substantiate the same in the course of the proceedings before me, therefore, as constrained to uphold the said addition. Thus, the Ground of appeal raised by the assessee is dismissed in terms of the aforesaid observations. Ground raised by the assessee is dismissed.
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