2019 (1) TMI 757 - SC - Income Tax

Disallowance of interest being the interest referable to interest free loans and advances given to subsidiary companies - interest free fund available to the assessee is sufficient to meet its investment - Held that:- The issue raises a pure question of fact. The High Court has noted the finding of the Tribunal that the interest free funds available to the assessee were sufficient to meet its investment. Hence, it could be presumed that the investments were made from the interest free funds available with the assessee. The Tribunal has also followed its own order for Assessment Year 2002-03. In view of the above findings, we find no reason to interfere with the judgment of the High Court in regard to the first question. Accordingly, the appeals are dismissed in regard to the first question.

Claim of depreciation - optional and could not be thrust on the assessee, if it had not claimed it - Held that:- Isuue to be governed by the decision of this Court in Plastiblends India Limited Vs. Additional Commissioner of Income Tax, Mumbai and Another [2017 (10) TMI 423 - SUPREME COURT OF INDIA]

Pre-operative expenses incurred in connection with creation of plant & machinery in units which have not commenced production - allowable revenue expenditure - deduction under Section 80M - transfer pricing adjustment - Held that:- As High Court has failed to independently evaluate the merits of the departmental appeals. Hence, we consider it appropriate that the aforesaid questions are considered afresh by the High Court. In order to facilitate a fresh exercise being conducted in relation to the aforesaid four questions (Question Nos.2,3,4 and 5), we allow the appeals and set aside the impugned judgment of the High Court. The appeals stand restored to the file of the High Court for that purpose.