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2015 (9) TMI 966 - BOMBAY HIGH COURT

2015 (9) TMI 966 - BOMBAY HIGH COURT - TMI - Addition on interest in respect of loans advance to sister concerns - CIT(A) deleted addition - Held that:- S.A. Builders Vs. CIT(A) [2006 (12) TMI 82 - SUPREME COURT] wherein it has been held that what has to be considered is whether the advance was given as a measure of commercial expediency on the part of the respondent-assessee. The Court observed that the revenue cannot put itself in the arm chair of businessman and decide how the business is to .....

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he Tribunal holding that the commission as claimed had been paid. The view taken by the Tribunal is a plausible view and the same has not been shown to be perverse.- Decided in favour of assessee.

Disallowance towards cash expenses - Tribunal allowed part relief - Held that:- We find that the CIT(A) and the Tribunal have reached concurrent findings of fact in restricting the disallowance to the extent of 10% of the cash expenditure. This results in reversing the ad-hoc disallowance of .....

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: Mr Mandar Vaidya, Adv. ORDER P. C. This appeal under Section 260A of the Income Tax Act, 1961 (the 'Act') challenges the order dated 11 January 2013 passed by the Income Tax Appellate Tribunal (the 'Tribunal'). The appeal relates to the Assessment Year 2007-08. 2. The revenue has framed the following questions of law for our consideration: "1) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in upholding the CIT(A)'s orde .....

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Commission of ₹ 9,23,654/- paid to related parties merely because it was paid by cheque and TDS was deducted? 3) Whether on the facts and in the circumstances of the case and in law, the order of the Tribunal was not perverse in restricting the disallowance towards cash expenses by AO to ₹ 25,00,000/- out of ₹ 37,63,853/- without appreciating the facts of the case and without appreciating the fact of non existence of supporting vouchers?" 3. Regarding Question No.1: (a) T .....

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the same line of business as M/s Samdhani Steels Pvt. Ltd. viz. Trading in nonferrous and ferrous materials. Besides the respondent-assessee had business dealings with M/s Samdhani Steels Pvt. Ltd. in having purchases of over ₹ 2.55 crores and sales of ₹ 2.90 crores during the subject assessment year. In the above view, the CIT(A) held that the advance of ₹ 36 lakhs paid to M/s Samdhani Steels Pvt. Ltd. a sister concern, was utilization of funds by the assessee for its busines .....

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observed that the revenue cannot put itself in the arm chair of businessman and decide how the business is to be conducted. (d) Thus if the expenditure has been incurred on account of commercial expenditure, then even if there is no legal obligation to incur it, the same is to be allowed. In the above view, the question as proposed does not raise any substantial question of law. Accordingly Question (1) as proposed is not entertained. 4. Regarding Question No.2: (a) For the subject assessment ye .....

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made necessary enquiry into the claim of commission paid. This enquiry could be done by examining the persons to whom the commission is paid and/or make enquiry from parties from/to whom the the respondent-assessee had made purchases and sales with regard to which the commission was paid to the above parties. This is particularly so as that the respondent-assessee had provided various details including the assessment details of parties concerned. In these circumstances, the CIT(A) disallowed the .....

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nal holding that the commission as claimed had been paid. The view taken by the Tribunal is a plausible view and the same has not been shown to be perverse. Accordingly, Question (2) as proposed is not a substantial question of law and is not entertained. 5. Regarding Question No.3: (a) The respondent-assessee had incurred cash expenses of ₹ 37.63 lakhs during the year. The expenses incurred in cash were allowed on account of transportation charges, salary and wages, coolie and cartage, ve .....

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