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2012 (10) TMI 562 - AT - Income TaxInterest on Cash Credit - diversion of funds - sister concerns - Held that:- If the work-in-progress is diverted by way of corresponding journal entries, it cannot be considered as funds diverted and interest paid on loan cannot be disallowed - set aside this issue to the file of the AO to examine whether the assessee diverted the funds or work-in progress and decide the issue afresh in accordance with law. Interest on hire purchase loans - Held that:- As this loan is availed for the purpose of acquiring the asset for the purpose of business, interest on the same should be allowed - AO is directed to examine the issue whether the asset on which loan is availed for the purpose of business or not and decide the issue accordingly. Disallowance Interest on TDS - restored to the file of the AO with a direction to examine whether the assessee itself added back the said amount while filing the return of income or not and decide the same in accordance with law after giving reasonable opportunity of hearing to the assessee in the matter - appeal of the assessee is treated as allowed for statistical purposes.
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