Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (6) TMI 323 - AT - Income TaxLoan Processing fees - whether considered as interest for purpose of Section 2(28A) and 194A - Held that:- Definition of Section 2(28A) clarifies that it includes all the charges in respect of moneys borrowed or debt incurred or in respect of any credit facility whether it has been utilized or not. Therefore, such loan processing fee fell within the said definition. Also, unless context otherwise requires "interest" mentioned, in Section 194A has to be understood in accordance with the definition of "interest" given u/s 2(28A). Therefore, assessee was obliged to deduct tax at source which it had not done so. Rigours of Section 40(a)(ia) is attracted - Decided in favor of Revenue Dis-allowance u/s 14A - assessee considered pro rata interest on investments made to earn dividend income on ground that borrowed money was invested in various companies and shares were not allotted in some of such companies, hence, interest could not be attributed to earning of any dividend income on such investments - Held that:- Intention of the assessee for earning dividend income could not be attributed to the amounts invested in share application money, unless and until there is a commitment brought on record by the concerned company for allotment of shares, and the share application money can at the best be considered only as a loan given by the assessee to the said company. We remit the issue back to the AO for fresh consideration in accordance with law.
|