TMI Blog2023 (5) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... that lower authorities disallowed the expense without doubting genuineness of such expenses and assessee filed cash book for such expense - HELD THAT:- As assessee has shown expense of Rs.24.69 lakh, which was paid in cash and no justification was given before AO. AO reasonably disallowed only 20%. The Ld. CIT(A) further reduced it to 10%, thereby granted further relief of 50%. Entire expense assessee has shown in cash. Therefore, no reason to interfere with the finding of Ld. CIT(A). This ground of assessee s appeal is dismissed. Disallowance of interest expense u/s 57 - assessee submits that Assessing Officer made addition by taking view that assessee has not furnished any details and Ld. CIT(A) confirmed the action of Assessing Officer by holding that no certificate as per Rule 31ACB in Form 26A is furnished - HELD THAT:- As the assessee failed to prove the nexus between the interest income offered in the return of interest expense made. Thus, this ground of appeal is dismissed. - ITA No.203/SRT/2020 - - - Dated:- 28-4-2023 - Shri Pawan Singh, Judicial Member For the Assessee : Shri Mahul Shah, C.A For the Revenue : Shri Vinod Kumar, Sr-DR ORDER UNDER SE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... response was made nor any detailed like PAN, or addresses of the parties were furnished. The Assessing Officer in absence of detailed made a disallowance of Rs.3,45,378/- under section 40(a)(ia) of the Act. The Assessing Officer further noted that assessee has also paid Rs.24,69,150/- in cash on account of machinery salary . The assessee was asked to furnish details of such expense. Assessing officer recorded that no details were furnished by assessee nor name and address of person to whom said expenses were paid, were given. Accordingly, in absence of such details the assessing officer disallowed 20% of such expense, thereby worked out the disallowance of Rs.4,93,830/-. The Assessing Officer also noted that under the head income from other sources of Rs.36,693/-. The assessee claimed interest expenses of Rs.3,95,466/-. The assessee was asked to furnish relevant details. The Assessing Officer recorded that despite service of show cause notice, no details of parties nor evidence for justification of such expenses were furnished. The Assessing Officer disallowed interest expense of Rs.3,95,466/- and back to the total income of assessee. 3. Aggrieved by the additions in the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. 4. The Ld. CIT(A) after considering the submission of assessee granted partial relief to assessee. On disallowance u/s 40(a)(ia) of the Act, the Ld. CIT(A) held that out of total disallowance of Rs.3,45,378/- under section 40(a)(ia), the addition of Rs.1,65,208/- relates to interest expense and Rs.1,80,170/- on account of transport expense. The Ld. CIT(A) held that so far as addition of interest expense is concerned, if the Nareshbhai Kumbani, Jograj Sampatraj and Co. and Jogrtal S. Rana (HUF) have included interest in their ITR, the assessee would get relief provide as they fulfilled the condition of proviso to Section 40(a)(ia) r.w.s. 201(1) of the Act. However, assessee has not furnished required certificate as per Rule 31ACB in Form 26A so the condition was confirmed. On the other disallowance of transport expense, the Ld. CIT(A) held that assessee only provided PAN of the transporter and no other evidence, the Assessing Officer pointed out without various lacunae, which has not been satisfactorily explained in rejoinder. Therefore, such addition was also confirmed by Ld. CIT(A). On the disallowance of Rs.4,93,830/- on account of machinery expenses, the Ld. CIT(A) restri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties and perused the record carefully. This disallowance consists of two components; (i) relates to disallowance of transport expense to Kishan Tempowala. I find that assessee has provided PAN of the transporter and the details of transport expenses. The genuineness of said expense is not doubted either by Assessing Officer or Ld. CIT(A). I further find that as per Section 194C(6) that the assessee has provided PAN of the transporter and the transaction is not disputed and no disallowances of such transport expense is warranted. Similarly, the view taken by Co-ordinate Benches of Bangalore in the case of South India Freight Carriers (supra). (ii) part of relates to interest disallowance on account of interest paid to three parties, I find that assessee has filed copy of ITR of recipients of the interest along with certificate of Chartered Accountant as required Rule 31ACB in Form 26A. Therefore, this part of ground is allowed subject to verification by Assessing Officer. This part ground of assessee is allowed in above terms. 8. Ground No.2 relates to disallowance of machines salary expense. The Ld. AR for the assessee submits that Assessing Officer disallowed 20% of machine s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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