TMI Blog2016 (1) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... exceeds the amount of disallowance which has been confirmed by the ld. CIT(A). In our considered view, action of the ld. CIT(A) seems to be reasonable and it does not call for any interference in the matter, particularly in the absence of any material having been brought on record to show that the disallowance confirmed by the ld. CIT(A) is inadequate or unreasonable. We, therefore, uphold the action of the ld. CIT(A) and decline to interfere in the matter. - Decided against revenue Disallowance on account of interest expenses - assessee itself had agreed that the advances are made out of loan from HDFC Bank (interest bearing fund) - CIT(A) deleted the disallowance - Held that:- as noted by the ld. CIT(A), the assessee has share capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not substantiate its claim with tenable evidences. 3. So far as this ground of appeal is concerned, the relevant material facts are like this. During the course of scrutiny proceedings, the Assessing Officer noted that the assessee has incurred business promotion expenses mounting to ₹ 11,74,510/- which are far in excess of the business promotion expenses of ₹ 1,54,899/- incurred in the immediately previous year. It was in this backdrop that the details of business promotion expenses were called for and examined. The Assessing Officer noted that the assessee was not able to give bills and evidences in support of expenses other than expenses of ₹ 5,19,350/- in respect of purchase of foreign exchange and expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure incurred is in respect of petrol, air tickets, restaurant charges, hotel rent charges, memento etc. incurred for the business of the Appellant only and accordingly page nos.4 to 35 of Paper Book was referred. So far as the observation of the AO that the credit card statements are in the name of Managing Director Mehulbhai Zaveri and therefore, the expenditure incurred are not for the purpose of business of the Appellant is concerned, the authorised Representative argued that merely because the same has been incurred through the credit card of the director of the Appellant, it cannot be suspected that the expenditure might have been incurred for personal use of the director. In fact, as per the Companies Act also, the director is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 2,82,937/- is deleted hereby. 4. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position. We have noted that so far as the disallowance for business promotion is concerned, the major portion of the expenses i.e. ₹ 7,88,883/- pertains to expenses incurred abroad and foreign travel. This disallowance has already been deleted and the Assessing Officer is not in appeal. As regards balance amount of ₹ 3,82,937/-, the ld. CIT(A) has already confirmed the disallowance to the extent of ₹ 1,00,000/- in respect of element of personal expenses, yet the Assessing Officer is in appeal. There is no material, however, to show that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material on record and duly considered facts of the case in the light of applicable legal position. We find that, as noted by the ld. CIT(A), the assessee has share capital of ₹ 2,97,21,600/- and accumulated profit to the extent of ₹ 2,20,75,710/-. Clearly, therefore, the assessee has sufficient non-interest bearing funds which covers more than the interest free advance of ₹ 45,00,000/- to its director. In view of this factual position and in the light of Hon'ble Bombay High Court's judgement in the case of CIT vs. Reliance Utilities 313 ITR 340, which holds that as long as sufficient interest free funds are available to an assessee, no disallowance can be made in respect of interest free advances given by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
