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2017 (7) TMI 33 - AT - Income TaxDisallowance of financial charges by 50% - contentions of assessee that these financial charges have arisen only because of discounting of the bills and funds are utilised for payment to the creditors - Held that:- Contention of assessee was neither examined by the AO nor by the CIT(A), even though assessee is insisting on this. As seen from the orders in earlier years and also in AY. 2008-09 and 2009-10, the financial charges are allowed as such in scrutiny proceedings, that too in post search proceedings in AYs. 2004-05 and 2005-06. This means that the financial charges are utilised for the purpose of business only. We are prima-facie satisfied that the financial charges cannot be disallowed. However, AO has not given any finding whether the funds are really diverted to sister concerns, out of the funds availed due to discounting of bills. Therefore, for the limited purpose of verification, the issue is restored to the file of the AO. Appeals of assessee allowed for statistical purposes.
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