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2019 (4) TMI 1667 - ITAT CHANDIGARHDisallowance of ‘Pooja Expenses’ of the total expenditure claimed - Addition on adhoc basis - HELD THAT:- Assessee had furnished unit wise details of day to day Pooja Expenses before the Ld. CIT(A). Further, the remand report was also called upon by the CIT(A) from the AO. AO has not disputed the contention of the assessee that out of the total Pooja Expenses of ₹ 1,47,886/-, an amount of ₹ 83,316/- was relatable to Haridwar Unit, the total income of which was eligible for deduction u/s 80IC. Further, considering the small amount of ₹ 64,570/- incurred by the assessee for normal day to day Pooja expenses as compared to the total returned income of ₹ 12,94,52,310/-, we do not find any justification on the part of the lower authorities in making the aforesaid disallowance, as admittedly, the said Pooja expenses have been incurred in the premises of the unit for the need of the workers and to maintain peace and harmony among them. Disallowance of foreign travelling expenses - HELD THAT:- CIT(A) has allowed the expenditure relating to the foreign travel of the wife as well as has restricted the disallowance relating to the boarding & lodging of the children to the extent of 25% of the total boarding & lodging expenditure as against 50% made by the AO. As noted above, the assessee has disputed the calculation made by the CIT(A) in this respect also. Since there is a calculation issue, we restore the matter to the file of the AO to recompute / calculate the disallowance made under this head after going through the order of the AO as well as considering the relief granted by the CIT(A). Disallowance of interest expenditure u/s 36(1)(iii) - HELD THAT:- The issue is now squarely covered by the recent decision of the Hon'ble Supreme court in the case of ‘CIT (LTU) Vs. Reliance Industries Ltd.’ [2019 (1) TMI 757 - SUPREME COURT] as affirmed the proposition of law that if the own funds / interest free funds are available with the assessee to meet the investment, presumption will be that the assessee had used its own / interest free funds for the said investment. This issue is accordingly decided in favour of the assessee and the disallowance made u/s 36(1)(iii) of the Act is ordered to be deleted. Appeal of the Revenue is dismissed on account of low tax effect being hit by the CBDT Circular No. 3/2018 dated 11.07.2018, whereas, the Cross objections of the assessee, in view of our observations made above, are treated as allowed for statistical purposes.
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