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2021 (9) TMI 599 - AT - Income TaxAddition u/s. 36(1)(iii) r.w.s. 37 - interest-free loan to subsidiary in Malaysia out of borrowed funds and has not derived any business advantage by advancing such a huge amount - As per DR no commercial expediency to advance such loan - HELD THAT:- Though the assessee advanced interest bearing funds to subsidiary in Malaysia, the assessee has not been able to establish any commercial expediency to such advancing of interest free loan to this company and both the companies are in different line of business. Further, after receiving the loan from assessee company, subsidiary Company used the same funds to advance to the related parties from year to year as seen from its annual accounts reproduced in earlier para. Being so, the CIT(Appeals) rightly held that the assessee company and subsidiary are in two different business being land development & construction and hospitality and the assessee has not been able to establish any business advantage derived by the assessee by advancing such loan to Amethyst Hospitality (P) Ltd. - CIT(Appeals) is justified in sustaining the addition made by the AO by invoking the provisions of section 36(1)(iii) of the Act.- Decided against assessee.
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