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2014 (3) TMI 846 - HC - Income TaxRevisional powers u/s 263 of the Act - Netting and set off of interest towards interest paid - Whether the assessee is entitled for netting of interest by setting off of interest earned towards interest paid – deposits made by the assessee were made due to compulsion for procuring import licence and letter of credit - Held that:- Revenue rightly contended that the Tribunal committed grave error of law in directing the AO to allow netting of interest and grant set off of interest earned towards interest paid without verifying whether the deposits made by the assessee were made due to compulsion for procuring import licence and letter of credit and that the assessee had borrowed the amount from the bank on interest. The assessee did not place any material on record to show that the fixed deposits were made due to compulsion for procuring import licence and letter of credit and for that purpose the assessee had borrowed the amount from the bank on interest - the jurisdictional Commissioner of Income Tax shall examine the case/record if he deems fit and proper and in exercise of his revisional powers u/s 263 of the IT Act – the Commissioner shall examine whether the assessee is entitled for setting-off of interest earned towards interest paid – Decided in favour of Revenue.
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