Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2014 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (11) TMI 1079 - HC - Income TaxDisallowance of interest paid on the amount borrowed by the assessee - assessee had lent it to its sister concerns without charging any interest thereon? - Held that:- A.O has not proved the nexus between the interest bearing fund and the interest free advances. The funds have not been given to the sister concern during the accounting period of the relevant year. The A.O has to establish direct correlation between the funds borrowed on interest and funds lent without interest.In the absence of such correlation, disallowance was held to be unjustified. - Decided in favour of assessee Addition to the value of closing stock - difference between the value of stock-in- trade as per the books of accounts and the statement which was submitted by the assessee to its banker for availing credit facilities by way of hypothecation of the stock - Held that:- the assessee has proved on record that the group of companies were maintaining stock at a common place. The stock of the other group concerns were given in the Bank statement. This fact was also brought to the notice of the Bank. Similarly, a letter given by the Bank Manager to the Director of the assessee was on record, which is indicative of the fact that the assessee has informed the Bank regarding common stock position at one place of the sister concerns. In this way, the assessee has duly discharged the onus of explaining the excess stock and the CIT(A) was justified in deleting the addition. - Decided in favour of assessee
|