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2014 (4) TMI 969 - GUJARAT HIGH COURTDeletion of interest – borrowed funds utilized for non-business purpose – Held that:- The Tribunal have rightly examined in detail the pattern of investment, loans and advances as also considering the fixed assets and cash noted that there was no fresh borrowing and already borrowed funds had reduced from Rs1953 lakhs to Rs.1239 lakhs - The substantial reduction led the tribunal to note that it would not be possible to hold that the borrowed funds were not used for business purpose merely because the investment, loans and advances given to the partners and the debit balance of the partner’s capital account had gone up. The Tribunal has rightly held that Rs.97.26 lakhs interest free advance were made whereas the assessee had interest free fund to the tune of Rs.95.80 lakhs available with it, only for the remaining sum of Rs.1.46 lakhs, it had confirmed the disallowance of the interest - there is no reason to interfere in the reasonings in absence of any perversity - in absence of any fresh borrowings in A.Y. 2003-2004, reduction of borrowed funds could not be assumed to be for non-business purpose with corresponding advances to the partners in wake of appreciation of entire gamut of facts and details presented before the Revenue authorities – Decided against revenue.
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