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2014 (1) TMI 864 - ITAT AHMEDABADDeletion made on account of disallowance u/s 40(a)(ia) of the Act - Held that:- There is no contract between the assessee and the transporter and the section 194C is applicable to work contract - the clearing and forwarding contractor appoints for transportation of goods, and hence the only responsibility of the assessee was to make payment on receipts of goods - Relying upon CIT Vs United Rice Land Ltd [2008 (5) TMI 142 - PUNJAB AND HARYANA HIGH COURT] - in the absence of any documentary proof to establish that there is an agreement between the assessee and the transporter for carriage of goods, the order of the CIT(A) upheld – Decided against Revenue. Deletion made u/s 40(a)(ia) of the Act – Disallowance of cooli & cartage expenses – Held that:- CIT(A) has observed that these types of expenses are very petty in nature and incurred in the day-to-day running of any business, and that payments to labourers, who are usually illiterate and normally do not provide any bill or vouchers for the payment they receive - In a business, expenses of this type do happen in all regularity, which is a business necessity - there is nothing more has been brought on record by the Revenue - Decided against Revenue. Deletion made on account of disallowance of bad debts expenses u/s 36(1)(vii) of the Act - Held that:- CIT(A) allowed the claim of the assessee on the ground that the AO has accepted the fact that the bad debts was on account of advance for supply of raw-materials, and the party to whom the payment was being weak, the said bad debts became bad in nature - the assessee has succeeded in proving that the advances for the purpose of business and that the debt has been written off in the books of accounts – The decision in T.R.F. Ltd. Vs. CIT [2010 (2) TMI 211 - SUPREME COURT] followed – Decided against Revenue. Deletion made on account of disallowance of interest expenses – Held that:- The rate of interest of 12% of borrowed funds should not have been considered as excessive - the assessee has satisfactorily explained the business exigencies for raising loan from other parties, and utilising the same wholly and exclusively for the purpose of business, and the rationale for keeping funds with the banks in the form of FDRs, which are valid points as a prudent businessman does normal course of business - the rate of interest @12% claimed by the assessee was too excessive or unreasonable, so as to prohibit the assessee from claiming the deduction in respect of loan taken from the relatives or for that matter, ‘specified persons’ - thus, the CIT(A) has justified in deleting the addition on account of disallowance of interest expenses by the AO – Decided against Revenue. Deletion made on account of disallowance of brokerage expenses – Held that:- The assessee has furnished before the AO the copies of sales register and other records to prove its case, as is evident from its reply and the observations of the CIT(A) - The assessee has also produced before us the copies of ledger account of brokerage expenses and bills and ledger account of parties - the addition was made only on assumption and hurried generalisation of the fact and observed that appellant has duly discharged his burden - The Revenue has not brought any material to convince us that the expenditure was not genuine or reasonable for the business purpose - the assessee has established with explanations and the accounts that the claim of the assessee is genuine and reasonable – thus, CIT(A) is justified in deleting the disallowance made by the AO – Decided against Revenue.
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