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TMI Blog2013 (4) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... n made in this regard is deleted - in favour of assessee. Disallowance of Car expenses - CIT(A) restricted the disallowance of Rs.68,110 to Rs.30,000 - Held that:- As the appellant has not been able to establish that the car was exclusively used for the business purposes by producing the log book of the car before the authorities below. A part of car expense and depreciation had been disallowed during the preceding years and the same finding has not been challenged by the assessee on any count. Thus addition as partly confirmed by the Commissioner of Income Tax(A) cannot be held as highly excessive and unreasonable. Disallowance of telephone expenses - CIT(A) restricted the disallowance of Rs.24,449 to Rs.10,000 - Held that:- DR has not disputed the fact that the entire telephone expenses have been allowed by the AO during the preceding years to the year under consideration. Thus unable to see any valid reason to make a part disallowance of Rs.10,000 by the CIT(A), thus was not justified and it was made without any reasonable basis. Disallowance of freight and cartage and traveling expenses - CIT(A) confirmed a part disallowance - Held that:- On specific query from the Boa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcessive, 4.1 That on the facts and in the circumstances of the case, CIT(A) erred in restricting the disallowance of Rs.20,000/- made by the AO out of freight Cartage and traveling expenses to Rs, 15,000/- CIT(A) should have deleted the entire disallowance of Rs.20,000/- made by the A.O. 4.2 That on the facts and in the circumstances of the case and without prejudice to the generality of ground of appeal no.4.1 above, the disallowance of Rs. 15,000/- made by the CIT(A) is highly excessive." 3. Briefly stated, the facts giving rise to this appeal are that the case was selected for scrutiny through CASS and notice u/s 143(2) and 142(1) along with detailed questionnaire were served on the assessee after affording due opportunity of hearing to the assessee, the Assessing Officer made certain additions and finalized the assessment on total income of Rs.21,69,700 as against the returned income of Rs.15,01,050 as declared by the assessee. The aggrieved assessee filed an appeal before the Commissioner of Income Tax(A), Muzaffarnagar which was partly allowed and now the assessee is before this Tribunal with the ground as mentioned hereinabove in this order. Ground No. 1.1 1.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the above submissions, ld. DR submitted that the assessee paid interest @16% per annum on unsecured loans received from his family members which is on the higher side as per generally applicable bank interest i.e. @12% per annum. The DR further submitted that the Commissioner of Income Tax(A) rightly observed that on the closing of the financial year i.e. 31.3.2009, the assessee has shown unsecured loans more than Rs.1.1 crore and liquid cash of Rs.43.92 lakh was available with the assessee. Therefore, this contention of the assessee was not tenable that the entire unsecured loans were used for making business transactions. The DR supported the orders of the authorities below. 7. On careful consideration of the submissions of both the parties at the outset we observe that admittedly, the amount of deposit of JK Paper Ltd. is not a loan but it is a deposit by the distributor to the manufacturing company under selling and distributor agreement which is mandatory to obtain a distributorship. The DR has not disputed this point that the assessee was allowed interest on unsecured loan @16.5% during the earlier two years to the year under consideration. As it is apparent from the deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly used for business purposes. 10. Ld. DR replied during the preceding year i.e. AY 2006-07, the Commissioner of Income Tax(A) also confirmed the disallowance of Rs.6000 out of car petrol expenses and Rs.8000 out of car depreciation on account of personal use by the proprietor assessee. He submitted that in this situation, the action of the Commissioner of Income Tax(A) restricting the disallowance to the tune of Rs.30,000 cannot held as unjustified. The DR supported the impugned order. 11. On careful consideration of rival submissions, we observe that the appellant has not been able to establish that the car was exclusively used for the business purposes by producing the log book of the car before the authorities below. A part of car expense and depreciation had been disallowed during the preceding years and the same finding has not been challenged by the assessee on any count. In this situation, addition as partly confirmed by the Commissioner of Income Tax(A) cannot be held as highly excessive and unreasonable. Accordingly, ground no. 2.1 and 2.2 of the assessee is devoid of merits and we dismiss the same. Ground no. 3.1 3.2 12. The counsel for the assessee submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following observations:- "The facts of the case as well as submissions made by the appellant have been carefully considered. It is observed that the AD had made addition of 20,000/- on the ground that some of the vouchers were partly vouched or supported by self made vouchers. On the other hand the appellant has contended that the expenses debited under the aforesaid heads were incurred for business purposes. From the perusal copies of ledger accounts in travelling it is gathered that the appellant and her family members made visits to various places and stayed there for many days. Thus it is not understood what business purpose was solved by such visits of many days stay. The appellant has not furnished specific details of the nature of such visits. However, the disallowance made out of freight charges (inward) is called for as such expenses are incurred in cash. Further, the appellant has also furnished copy of such expenses which are considered reasonable considering the sales/purchases made by the appellant. Thus under the facts of the it would reasonable and justified in the amount of disallowance is restricted to Rs.15,000- as against Rs.20,000/- made by the AO. Thus the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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