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2024 (2) TMI 583 - ITAT DELHINature of expenses - Disallowance under the head 'Delay in security charge on loan' when loan itself was not utilized for business purpose and was given to its sister concerns without any basis, moreover, it is a capital expenditure - CIT(A) was convinced that the impugned expenditure has been made by the assessee wholly and exclusively for the purpose of business and allowed the same - HELD THAT:- We find that the ld. CIT(A) has deleted the addition on proper appreciation of facts and the ld. DR could not bring any distinguishing facts. We, therefore, decline to interfere. Ground No. 1 is dismissed. Disallowance of the addition on account of interest paid to M/s Bhayana Builders Pvt Ltd and M/s Logix Infrabuild Pvt Ltd. - HELD THAT:- Due to certain defects in the project, the assessee refused to pay second 50% of the retention amount to M/s Bhayana Builders Pvt Ltd. and the quarrel travelled upto the Arbitration Tribunal and the Arbitration Tribunal decided the quarrel in favour of M/s Bhayana Builders Pvt Ltd. Thereafter, the assessee carried the matter to the Hon'ble High Court [2017 (8) TMI 1720 - DELHI HIGH COURT] directed the assessee to return the money along with interest @ 6%. This interest has been claimed by the assessee, which has been disallowed by the AO. On the given facts, we do not find any reason/merit in the disallowance as the same has been paid as per the directions of the Hon'ble High Court. The ld. CIT(A) has rightly deleted the same and thus, calls for no interference. Interest paid to M/s Logix Infrabuild Pvt Ltd - There is no denying that the said advance was given for the acquisition of land in furtherance of the objects of the assessee’s business. There is also no denying that both the assessee and M/s Logix Infrabuild Pvt Ltd. were engaged in the development of real estate projects. These undisputed facts go on to show that the impugned advance was purely a business advance and by no stretch of imagination it can be considered that the assessee has transferred borrowed funds as interest free advances - no merit in the disallowance made by the Assessing Officer. The ld. CIT(A) has rightly deleted the addition which calls for no interference. Disallowance on account of professional charges - HELD THAT:- CIT(A) was of the opinion that any expenditure incurred for obtaining loan is allowable as revenue expenditure and correctly deleted the addition. Disallowance on account of foreign currency fluctuation expenses - HELD THAT:- By looking into the documentary evidences filed the appellant, it is clear that the total expenses incurred by the appellant on account of the termination of loan agreement however, due to hedging of loan through swap currency agreements, the appellant got benefit due to foreign exchange rate. Accordingly, net amount charged by the appellant in P&L A/c is duly allowable. The disallowance made by the AO on account of foreign currency loan is hereby deleted. Adhoc disallowance being 20% of the facility management charges - CIT(A), after verifying the ledger account, audited balance sheet, sample invoices and agreement with respective parties, came to the conclusion that disallowance cannot be made on adhoc basis without identifying specific default and without putting forth any cogent evidence, thus addition was deleted - HELD THAT:- Since the addition was made on adhoc basis without pointing out any defect, we do not find any reason to interfere with the findings of the ld. CIT(A). This ground is dismissed. Disallowance u/s 36(1)(iii) on account of advance outstanding - HELD THAT:- We find that the undisputed fact is that the said money was given in F.Y. 2014-15 and not in the year under consideration and no adverse interference has been taken in earlier A.Ys. Therefore, on identical set of facts, there is no reason why a different view is taken during the year under consideration. We, accordingly, direct the Assessing Officer to delete the impugned disallowance.
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