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2021 (1) TMI 1019 - AT - Income TaxDisallowance of proportionate interest on capital advances provided by the assessee - contentions of the Ld. AR are that, the advances does not pertains to sister concerns but the balance with government authorities - HELD THAT:- We find, out of total amount of ₹ 50,64,880/- disclosed under short term loans and advances in the note to financial accounts, the amount of ₹ 47,11,874/- pertains to VAT, service tax, TDS and income tax refund receivables. Whereas the A.O. is of the opinion that these are the advances provided to sister concerns. Thus the advances disclosed in the financial statements are with the statutory authorities and the action of the A.O. to disallow proportionate interest considering such advances is not acceptable. Accordingly, we set aside the order of the CIT(A) and direct the Assessing officer to delete the addition and allow the grounds of appeal in favour of the assessee.
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