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2020 (2) TMI 67 - AT - Income TaxDisallowance of interest u/s 24(b) - whether there is no interest free advances to the directors during the year? - HELD THAT:- Issue of re-payment of loan and settlement of account was over at the end of the financial year 2007-08. Similarly in case of Smt. Jai Mala Agarwal, the loan amount was ₹ 70,80,000/- whereas the AO has wrongly mentioned as ₹ 45,00,000/- and repayment was made by the assessee at ₹ 65,80,000/-, therefore, there is no excess payment in that case. We find from the ledger account that the account of Smt. Jai Mala Agarwal was settled before the end of the financial year 2007-08 and there was no excess payment or outstanding. Once the accounts of these three directors were settled before the end of the financial year 2007-08 by utilizing the loan taken from the ICICI Bank, no disallowance on account of interest expenditure for the assessment years 2010-11 and 12-13 is called for. Since the entire loan amount availed by the assessee from ICICI Bank was finally utilized for repayment of the loans taken from the Directors before the end of the financial year 2007-08, then the issue was no more survived thereafter and consequently for the assessment year under consideration no disallowance is called for on account of interest expenditure. Accordingly, in the facts and circumstances of the case, we delete the disallowance made by the AO on account of interest payment under section 24(b) of the Act - Decided in favour of assessee.
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