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2017 (5) TMI 638 - PUNJAB AND HARYANA HIGH COURTDisallowance of interest expenditure - whether the investments in sister concerns served any business purpose? - Held that:- The investment in sister concerns in the shape of share application money was to the tune of ₹ 20,32,60,000/-. The assessee was having current liabilities and profits to the tune of ₹ 17,41,39,750/-. The total non interests bearing funds available with the assessee were at ₹ 49,43,04,638/-. Out of the total funds on which no interest was paid by the assessee amounting to ₹ 49,43,04,638/-, the assessee had advanced ₹ 20,32,60,000/-. Thus, there was sufficient non-interest borrowing funds out of which the assessee had advanced/invested in sister concerns. It was further recorded that in the assessment year 2012-13 also, the assessee had sufficient interest free funds to make investment in the group companies relying upon the decision of the Apex Court in Hero Cycle Private Limited Vs. Commissioner of Income Tax (Central) [2015 (11) TMI 1314 - SUPREME COURT OF INDIA] and Commissioner of Income Tax-I, Ludhiana Vs. M/s Abhishek Industries Limited, Ludhiana (2006 (8) TMI 123 - PUNJAB AND HARYANA High Court ). - Decided in favour of assessee.
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