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2022 (11) TMI 663 - AT - Income TaxDisallowance of interest made or borrowed funds which have been utilized for giving interest free loans to related parties - HELD THAT:- The onus is on the assessee to show that this deal was for commercial expediency purposes and the said sum was part of the stock in trade for the land so purchased. Even after being provided various opportunities by the lower authorities, the assessee failed to provide any details for the reason for such interest free advances. For the amount paid to M/s. Sigma Steel Engineers Pvt. Ltd and M/s. Horizon Hitech Engicon Limited, the assessee has merely mentioned that outstanding amounts for work executed. We fail to understand that if it was an outstanding against the work executed then, it should be a part of the current liability which the assessee has to pay and in case it is not an outstanding and given as an interest free advance for a work contract then, where are such work contract agreements. Neither before the ld. Assessing Officer nor before the ld. CIT(A), the assessee has been able to furnish any such details. Even before us also, general submissions have been made that the amounts have been utilized for commercial expediency purposes. It is for the assessee to prove that it is a part of commercial expediency and such interest free advance are given for the purpose of business and profession and if the assessee fails to satisfy then, the assessee cannot escape from such disallowance of interest expenditure which are in the instant case where the assessee has borrowed funds, paid interest thereon claimed it as an expenditure and used the interest bearing funds for making interest free advances. We, therefore, fail to find any infirmity in the finding of the ld. CIT(A) and the same is confirmed. Appeal of the assessee is dismissed.
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