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2012 (11) TMI 799 - AT - Income TaxDisallowance of interest expenses – alleged that assesses has advanced Rs.12 lacs to M/s. Millenium and Rs.20,65,000/- to M/s. Bajaj Chemical Products. On these advances no interest has been charged. The assessee is giving interest bearing funds without charging any interest - appellant submits that the loan to M/s. Millennium was given for very short period during the year. However, the principal amount had not received within the stipulated time and accordingly it was not prudent to charge interest – Held that:- AO had calculated notional interest presuming that the loan was given on the first day of accounting year, which is not correct. As the loan was given during the year, interest even on notional basis can be calculated for the days of use only though under the facts and circumstances, the same was not required - AO has not shown any nexus between interest bearing funds and the amount advanced at a lesser rate of interest. Thus, basically the nexus itself is not established - addition deleted – In favor of assessee Disallowance on account of payment of PF and ESIC – alleged that same were not paid within the due date provided in the relevant statute - Held that:- Amount in question has been paid before the due date of filing of return – disallowance deleted – In favor of assessee
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