TMI Blog2021 (4) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... man discretion and Assessing Officer cannot decide this aspect. Without any finding that assessee has actually not taken the loan and not paid interest on the loan or that assessee had diverted interest-bearing funds such addition lack cogency. In this view of the matter in our considered opinion the addition is not sustainable. Hence, the same is directed to be deleted. Disallowance on estimated basis out of travelling and telephone expenses - HELD THAT:- We find that the same has been done without bringing on record cogent material. Just writing that personal expenses cannot be ruled out the same cannot be ipso facto a ground for disallowance of expenditure. In this view of the matter in our considered opinion the addition made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various expenses such as telephone expenses, traveling expenses and sale of motor car. The appellant therefore prays to delete the same. The submission along with various judicial pronouncement made in this regard was not accepted at all. 5.) The appellant craves leave to the amend, alter or delete any of the above ground of appeal. 6.) In view of all these and other reasons, which may be produced during the process of hearing of appeal, the appeal may, please be allowed and justice rendered. 3. Brief facts of the case are that the Assessing Officer made disallowance of interest paid to bank loan amounting to ₹ 20,28,015/- on his reasoning that the same was not for business purpose. The Assessing Officer had rejected the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that on one hand the appellant wants to pay creditors promptly by borrowing loans on interest and on the other hand the appellant has shown huge outstanding debtors as on 31.03.2009 to the tune of ₹ 2,12,83,728/-, which are more than entire sales of the appellant. On the debtors no interest has been charged by the appellant (HUF). It was also seen that out of the outstanding debtors an amount of ₹ 25,92,478/- was due from M/s. Mohan Impex, which is an associated concern of the appellant. Further, the appellant has sold goods even to those debtor parties from whom the amounts were not forthcoming. One such party is M/s. Pruknil Apparel whose outstanding balance as on 31.03.2009 is ₹ 7,91,85,747-. Another contention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 20,28,015/-. Reliance is also placed on the decision of M/s. Triveni Engineering Works Ltd. Vs. CIT [167 ITR 742 (All)]. In view of the above discussion, I am of the considered view that the A.O. is quite justified in making the impugned disallowance. Therefore, the disallowance so made by the A.O. of ₹ 20,28,015/- is confirmed . 5. Furthermore assessing officer has made ad-hoc disallowance at the rate of 25% of the expenditure on travelling and telephone expenditure. This was done on the premise that complete details and vouchers were not produced and that personal element of the use cannot be ruled out. 6. Upon assessee's appeal learned CIT(A) reduced the disallowance from 25% to 20% of the above said expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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