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2008 (6) TMI 209 - HC - Income TaxDisallowance of proportionate interest on the sum advanced by the assessee to the partners as interest-free loans - Tribunal has not gone into the question whether borrowals were justified when the assessee had funds with it. The assessee was well aware of the maturity of the deposit and they could have easily limited the borrowals in such a way so that interest for the deposit amount is avoided after its maturity. The assessee, which advanced its funds as interest-free loans to the partners, has no justification to claim interest on borrowals on so much of amount. It cannot be denied by the assessee that the funds reaching its hands on maturity of deposits could not be utilised for its own business purposes - we reverse the order of the Tribunal and the first appellate authority and restore the assessment on disallowance
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