Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (7) TMI 627 - AT - Income TaxDisallowance of interest expenses - CIT(A) allowed it - Held that:- The assessee is continuing getting commission income from Pharma Agencies through sub-letting the agency. The loans were taken in earlier years for business purposes. Out of some of the loans given to sister concerns, part amount was outstanding due to debtors part has not been recovered during the year due to the financial position of the debtors. The assessee’s business is interconnected, interlacing, inter-dependent and there was one unit, thus warrants confirmation of the deletion made by the learned CIT(A) on old loans Excessive rate of interest in case of directors covered u/s 40A (2) (b) - Held that:- The rate of interest between 15% to 18% was allowed by the AO in the preceding assessment years which is also reasonable in view of prevailing market rate - As during the year the assessee has taken loan of Rs.12 lacs which was utilized for purchase of raw materials and same is not connected with the old business and also manufacturing has not been started during the year. Therefore, the AO is directed to re-calculate the disallowance of interest on Rs.12 lacs only on the basis of interest paid or provided in the loan account - against revenue.
|