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TMI Blog2017 (9) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... att, AR For The Revenue : Shri Suman Kumar, DR ORDER PER MAHAVIR SINGH, JM : This appeal by the assessee is arising out of the order of CIT(A)-30, Mumbai, in appeal No. CIT(A)-30/ITO-19(1)(1)/IT-99/11-12 dated 19-02-2014. The Assessment was framed by ITO ward 19(1)(1), Mumbai for the A.Y. 2006-07 vide order dated 28-12-2011 under section 143(3) of the Income Tax Act, 1961(hereinafter the Act ). 2. The first issue in this appeal of assessee is against the order of CIT(A) confirming the adhoc disallowance made by AO on account of Conveyance, Telephone and sundry expenses at 20% in the absence of verifiable vouchers. For this assessee has raised following ground No.1: - 1 . Under the facts and circumstances of the case and in law CIT ( A ) has erred in confirming the adhoc disallowance of Rs . 29,028 /- out of conveyance, telephone and sundry expenses without appreciating the fact that no disallowance was warranted in absence of any infinity, brought on record from an audited account . 3. We have heard the rival contentions and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were already tinder way and hence order of enhancement passed by the CIT ( A ) should be annulled and in such a case the addition of notional interest made by the AO be also deleted . ( d ) In case if the enhancement made by the CIT ( A ) be deleted, as a consequence it is also prayed that notional income being interest changed on consequence it is also prayed that notional income being interest changed on interest free advance added by the AO amounting to Rs . 3,77,345 /- be deleted . 6. Briefly stated facts are that the AO during the course of assessment proceedings noticed that the assessee has claimed interest expenses of ₹ 38,49,638/-. The AO required the assessee to explain the justification for utilization of loans taken from family member and interest paid and claimed against the business income. According to AO, the assessee has not charged in interest on the loan of Smt. Daksha Mehta and accordingly, he charged interest amounting to ₹ 3,77,345/- on loan advances to Smt. Daksh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is argument, because when the appellant was getting fund / loan @12 % to 15 % , as to why he has paid interest @18 % to his brother's wife and brother has not been justified . I, therefore, not only confirm the disallowance of interest paid at higher rate, but also enhance the same, as per the notice for enhancement of income . The A . O is, therefore, directed to add Rs . 9, 47,460 /- on the above a / c . instead of Rs . 3,77,345 /- only . Ground of appeal no . 1 is, therefore dismissed and income enhanced . 7 . 2 Ground of appeal no . 2 is against disallowance of Rs . 29,028 /- out of conveyance, telephone and sundry expenditure, which is @ 1 / 5th of above expenses of Rs . 1,45,142 /- on grounds of 1 / 5th amount being expenses on personal account . The A . O has also discussed that during the course of assessment proceedings AR could not submit any justificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harges @ 10 per cent to the sister concern of the assessee and such charges paid were considered to be reasonable by the appellant . ( iii ) For asst . yrs . 1989 - 90 and 1990 - 91 the assessee had reduced the payment of handling charges to 9 1 / 2 per cent to its sister concern . The AO has considered the payment of commission to the sister concern in the asst . yr . 1989 - 90 and allowed the claim after due scrutiny . For asst . yr . 1990 - 91 also the claim of the assessee @ 9 1 / 2 per cent has been allowed though the same has not been dealt with by the AO specifically in the order . ( iv ) For asst . yrs . 1993 - 94 and 1994 - 95 the assessment has been made by the AO under section 143 ( 3 ) and handling charges paid to the sister concern @ 9 . 5 per cent have been considered to be reasonable and allowed . ( v ) The sister concern of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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