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2022 (9) TMI 884 - HC - Income TaxDisallowance of interest expenditure - whether borrowed funds advanced by the Assessee to the Contract Bottling Units (‘CBUs’) used by the Assessee for the purposes of business since no revenue was disclosed from such activities? - addition made as Assessee had failed to prove a direct nexus of the said interest expenses for its business purposes as stipulated u/s 36 and 37 - ITAT upholding the order of CIT(A) and deleted the disallowance - HELD THAT:- CIT(A) has returned a finding of fact that the working capital loan taken by the Assessee for its business purposes was provided to the CBUs as per the terms and conditions of its agreement. The said working capital provided to the CBUs was taken into account by the parties while fixing the bottling charges payable under the agreement. CIT(A) concluded that the working capital loan availed by the Assessee from the Standard Chartered Bank had been used wholly and exclusively for the business purposes and therefore, deleted the addition on account of interest payment on loan made by the AO. Expenses of legal and professional fees as well as the warehousing and demurrage charges, debited to the profit and loss account CIT(A) held that since the AO has not alleged that these expenses are bogus or of a personal nature the same do not warrant any disallowance. CIT(A) held that the said expenses have been incurred wholly and exclusively for the business purposes and therefore, deleted the disallowances. ITAT and CIT(A), both fact finding authorities have concurrently held that the expenses claimed by the assessee were duly incurred in the course of business. In the present appeal, the appellant has not placed any material on record to contradict the aforesaid concurrent finding of facts returned by the ITAT and CIT(A) while reversing the disallowances made by the AO. The appellant has failed to point out any error of law in the findings of the ITAT - No substantial questions of law arise for consideration and accordingly, the appeal is dismissed.
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