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2019 (4) TMI 1793 - HC - Income TaxDeduction of interest on borrowed fund when the same is utilised to give interest free loan/share application money to subsidiary companies - HELD THAT:- Assessee is a private limited company and is engaged in the business of financing. During the scrutiny assessment of the assessee's return for the assessment year 2008-09, Assessing Officer noticed that the assessee had claimed expenditure of interest paid on borrowed funds. The assessee had also funded its sister concern without charging interest. The Assessing Officer therefore disallowed the interest expenditure. The issue eventually reached the Tribunal. The Tribunal by the impugned judgment held in favour of the assessee. The entire issue is squarely covered in favour of the assessee in case of S.A.Builders Ltd. [2006 (12) TMI 82 - SUPREME COURT] . The Tribunal correctly held that the assessee's decision to fund its subsidiaries driven by business exigency.
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