Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (1) TMI 425 - AT - Income TaxClaim of loss on sale of car rejected - assessee submitted that car is a business asset and used for the purpose of business - Held that:- It is not in dispute that the claimed loss on sale of cars was related to the sale of an imported car used as business asset for the business purpose by the assessee. It is also not in dispute that the assessee did not claim any depreciation on this imported car and he was not allowed any depreciation on it in view of prime condition attached to section 2(11). Thus CIT(A) rightly held that the loss incurred on sale of imported car was of capital loss. Hence, the same cannot be charged to P&L account because the imported car was not a part of block of asset and the same cannot be allowed as revenue loss - unable to see any reason to interfere with the impugned order in this regard - against assessee. Claim of interest rejected making reference to provisions of sec. 14A, 36(1)(iii) and 43B - Held that:- In the cases of S.A. Builders (2006 (12) TMI 82 - SUPREME COURT) and Madhav Prasad Jatia (1979 (4) TMI 2 - SUPREME COURT) it is held that the authorities should have ensured as to whether the interest free loan was given to the sister concern (which is a subsidiary of the assessee) as a measure of commercial expediency and if it was, then it should have been allowed. But in the present case, the issue of commercial expediency in advancing interest free loan to the sister concern has not been considered by the authorities below as assessee has neither submitted any details pertaining to the financial charges and interest as claimed in the Profit & Loss account nor explained the purpose of interest bearing loan and its use for commercial expediency and never furnished the source of funds of investment yielding tax free interest and dividend for the assessee. The onus is on the assessee to prove that the expenditure or loss is admissible. The assessee has to prove that the expenditure or loss claimed is an admissible deduction (Commissioner of Income Tax v Calcutta Agency Ltd. (1950 (12) TMI 4 - SUPREME COURT). If the assessee does not prove or fails to prove that the deduction is admissible, then the inference goes against him/her (Commissioner of Income Tax v Ashwani Kumar Liladhar (1996 (7) TMI 111 - ALLAHABAD HIGH COURT). However, once the assessee has discharged the initial onus to prove that the deduction is allowable, the onus to prove that the deduction is not admissible, shifts to the tax authorities (Janyantilal Kishorilal v CIT(1984 (8) TMI 54 - MADHYA PRADESH HIGH COURT). Since this fact is not in dispute that the assessee did not submit books of account and vouchers before authorities below to show that the interest bearing loans were taken for business purpose and indeed used for the same and investment which accrue tax free income were made from difference source of funds and which has no relation to interest bearing loans. At the same time, there is no material to show that the AO had an opportunity to examine the issue of claim u/s 36(1)(iii) and to determine the amount of expenditure incurred in relation to income which does not form part of total income in accordance with such method prescribed in section 14A(2) - the issue of disallowance of financial charges (interest) requires de novo adjudication thus restored back to the file of AO - in favour of assessee for statistical purposes.
|