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2015 (8) TMI 1146 - ITAT DELHIDisallowance under section 36(1)(iii) - utilisation of interest bearing funds for non-business activities - Held that:- The entire thrust of the assessee's submissions from the very beginning was that the amounts were advanced to group concerns, keeping in view the restrictions imposed by the Land Acquisition Act and this aspect we find has not at all been addressed by the lower Revenue authorities. If the advances were given out of commercial expediency then it is settled law that no disallowance is called for. From the details reproduced from balance-sheet as above it appears that the amounts were advanced for various purchases and, therefore, it could not be concluded that the interest-free advances given to group concerns, were not for business purposes. We find that these aspects have not at all been examined by the lower Revenue authorities and no findings have been recorded as to the purpose for which interest-free advances were given to group companies. The assessee's submissions are quite convincing that considering the restrictions imposed by the Land Acquisition Act, it had entered into various collaboration agreements. The Assessing Officer is required to record specific finding on these aspects before coming to the conclusion that the entire interest-free advance given to group concerns were not for business purposes. Thus restore the matter back to the file of the Assessing Officer to examine the issue de novo - Decided in favour of assessee for statistical purpose.
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