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2013 (12) TMI 3 - ITAT DELHIInvestment in shares - Claim for interest paid on loan taken for investments - Held that:- The shares were kept by the assessee as investment and not as stock-in-trade - The assessee borrowed the money not for the purpose of business but for the purpose of investment in the shares of another company - The funds borrowed were invested in the shares of M/s Den Networks Ltd. The investment in the shares of M/s Den Networks Ltd., is in the form of long term non-trade investment/capital investment - The assessee is not entitled to the deduction of interest paid on the money borrowed - Decided against assessee. Interst income setoff against interest expense - Held that:- The CIT(A) allowed the relief on the basis of consequence of certain presumptive events. That income is to be computed on the basis of facts as they existed and not on the basis of some hypothesis that had the assessee not advanced the money to other company it would have been required to borrow less money - The assessee has borrowed the money from UFPL which was evidently not borrowed for the purpose of business. The interest paid on such borrowing cannot be allowed as a deduction under Section 36(1)(iii) - The assessee may have interest income on its capital or on its non-interest bearing funds received from somebody else but the said interest cannot be set off against the interest payment on the basis of some hypothesis or presumption - Decided in favour of Revenue. Office and administrative expenses - Held that:- The were the expenses of general nature - Even when the assessee has not carried on the business, the certain expenses which were required to be incurred for maintaining the corporate status of the assessee is allowable deduction - In fact the assessee carried on the business during the accounting year relevant to the assessment year under consideration, whatever small scale may be of the business - Decided against Revenue.
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