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2012 (11) TMI 5 - AT - Income TaxAddition out of interest expenses - alleged that appellant company has diverted borrowed funds for interest free advance/loans given to associate concerns and directors of the appellant company - assessee submitted that the assessee has Rs.2.13 crores as capital and sundry creditors (without interest) and advances to sister concern was Rs.49.47 lakhs only, and therefore, own funds available without interest with the assessee, were much more than the advance made to the sister concern – Held that:- Assessee has advanced a sum of Rs.49.47 lakhs to its sister concern without interest which is fully covered with the interest free capital and sundry creditors amount available with the assessee, and therefore, no addition/disallowance in this case is called for - in favour of the assessee Addition on account of salary paid to relative of the Directors – Held that:- Onus was on the assessee to prove that the salary was paid to the lady directors of the assesseecompany on account of services rendered by them. We find that the assessee could not produce any evidence in support of its case - In the absence of any evidence to prove that two lady directors have rendered some services to the assessee-company - disallowance made was justified
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