Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (3) TMI 1046 - AT - Income TaxDisallowance of interest - Held that:- Advances were made for the purpose of import of rough diamonds, and simply because imports could not be effected the nature of advances would not change, has remained uncontroverted by the revenue. In any case, as held by Hon'ble Supreme Court in the case of S.A. Builders (2006 (12) TMI 82 - SUPREME COURT) the expression 'commercial expediency' is of wide import and even advances for the purpose of business of the sister concern are required to be treated as for business purposes. The Assessing officer was thus clearly in error in resorting to the disallowance on the short ground that while the assessee has borrowed the money on interest, it has given an interest free advance to the sister concern. CIT(A) was justified in reversing the disallowance so made by the Assessing Officer. - Decided in favour of assessee Addition u/s 41 - cessation of liability - assessee has shown an amount due to M/s Planet Star Trading Pvt. Ltd. for more than three years - Held that:- Unilateral entries in the accounts will not amount to cessation of liability, section 41(1) contemplate the obtaining by the assessee an amount either in cash or in any other way whatsoever benefit by way of remission of cessation. It should not be particular amount obtained by him. For the obtaining benefit to the assessee by virtue of remission of cessation is sine-qua-non for the application of this section. The mere fact that assessee has made an entry or transfer in its account unilaterally will not unable the department to say that section 41(1) of the Act would apply and amount be included in the total income of the assessee. - Decided in favour of assessee
|