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2017 (12) TMI 121 - AT - Income TaxGranting loans and advances to subsidiaries /ICD’s - interest bearing funds had been diverted in respect of the inter corporate deposit - Held that:- On perusal of the loans availed by the assessee, it clearly appears that these loans raised by the assessee are tied up loans for specific purposes such as vehicle loan, cash credits, packing credit etc. . There is no specific adverse finding on diversion of funds by the assessee w.r.t. loans raised by the assessee by both the authorities below. Under such circumstances, presumption will apply that the assessee has utilised its own interest free funds available with it for granting loans and advances to subsidiaries /ICD’s and also making investments, wherein we have seen that net owned funds are much higher than combined value of investments as well loans and advances granted by the assessee. The ratio of decision of Hon’ble Bombay High Court in the case of Reliance Utilities and Power Limited (2009 (1) TMI 4 - BOMBAY HIGH COURT) will apply. The additions as sustained by learned CIT(A) stood deleted and relief granted by learned CIT(A) stood confirmed. Disallowance u/s. 41(1) on account of cessation of liabilities - Held that:- CIT(A) has granted relief to the assessee as the assessee has written back these liabilities in AY 2007-08 except two liabilities firstly payable to Shaft Broadcast Private Limited on the ground that this liability was disputed/contested by the assessee before Hon’ble Bombay High Court and secondly liability payable to Mr. Sushant G Mohite wherein part payments was made by the assessee subsequently and partly the same was written back in AY 2007-08. The afore-said claims were made before learned CIT(A) for the first time wherein relief was granted by learned CIT(A) without verification . The AO is directed to make verification of the aforesaid claims so made by the assessee for the first time before learned CIT(A) and if the contentions of the assessee are found to be correct, we find no reason to withhold relief to the assessee.
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