Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Forum Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database More...
Extracts
Home List
← Previous Next →

Asstt Commissioner Of Income Tax Versus Vadilal Dairy International Ltd

Disallowance of interest expenses holding advances granted by the assessee to be not out of commercial expediency - CIT(A) deleted the interest - Held that:- CIT(A), while granting relief to the assessee, has noted that the assessee has given interest free advances to those parties with whom the assessee was having regular business transactions and some of them were suppliers of raw-material and packing material and the advance was made for purchase of material. He also noticed that most of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e on account of interest was made by the Assessing Officer in earlier years and after examining the various loans and advances in the light of the ratio laid down by the Hon'ble Apex Court in the case of S.A. Builder Ltd. (2006 (12) TMI 82 - SUPREME COURT ) has given a categorical finding that the loans and advances given by the assessee were for business purposes. Before us, the Revenue has not brought any material on record to controvert the findings of the ld. CIT(A). Thus no reason to interf .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent Years 2001-02 and 2002-03 respectively. 2. Before us, both the parties submitted that in both these appeals the common ground of appeal taken by the Revenue is that the CIT(A) erred in law and on facts in deleting the disallowance of ₹ 40,26,706/- in the Assessment Year 2001-02 and ₹ 33,65,950/- in the Assessment Year 2002- 03, made by the Assessing Officer on account of disallowance of interest. It was further submitted that since the facts & circumstances of cases in both t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

engaged in the business of manufacturing of Ice-cream by the trade name 'Vadilal'. The assesseecompany filed its original Return of Income for Assessment Year 2001-02 declaring loss of ₹ 1,12,77,669/-. The assessment was framed u/s 143(3) vide order dated 26.02.2004 and total income was determined at ₹ 59,56,858/- by inter alia disallowing interest of ₹ 1,54,72,055/-. Aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld. CIT(A) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r to decide the issue afresh keeping in mind the guidelines laid down by the Hon'ble Supreme Court in the case of S.A. Builder Ltd. Vs. CIT(A), [2007] 288 ITR 1 (SC). Pursuant to the aforesaid directions of the Hon'ble Tribunal, the Assessing Officer vide order dated 16.11.2009, passed u/s 143(3) r.w.s. 254 of the Income-tax Act, noted that the assessee had advanced interest free loans to sister concerns in spite of pending term loans and working capital loans on which the assessee was i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to the assessee. He, thus, disallowed the claim of interest and assessed the total loss at ₹ 72,47,965/-. 5. Aggrieved by the aforesaid order of the Assessing Officer, the assessee carried the matter before the ld. CIT(A) who vide order dated 20.07.2011 allowed the appeal of the assessee by holding as under:- "3.5 Decision: I have carefully perused the assessment order, the submissions given by the appellant, the order of the ITAT through which the matter was set aside to the file of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

inished goods. Some deposits are kept with various government / semi government authorities for getting electric connection, telephone connection, registration with sales tax authorities etc. Similarly, there is some balance with the excise authorities which was the advance payment of excise duty to be adjusted on clearance of goods. It is noticed that most of the advances were given in earlier years and there are few transactions during the current years. The Hon'ble ITAT had set aside the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e revenue cannot justifiably claim to put itself in the arm-chair of businessman or in the position of the Board of Directors and assume the role to decide how much is the reasonable expenditure having regard to the circumstances of the case. No businessman can be compelled to maximize its profit. In the case of the appellant, the appellant is a loss making company and had approached BIFR for declaring it as a sick company. The company had no liquid funds for its day to day business transactions .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

A. Builders, I am of the view that the loans and advances given by the appellant are for business purposes and no disallowance can be made by the A. O. by saying that interest bearing funds have been advanced as interest free loans. The addition made by the A. O. is accordingly deleted." 6. Aggrieved by the aforesaid order of the ld. CIT(A), the Revenue is now in appeal before the us. 7. Before us, the ld. Departmental Representative pointed out to the various observations of the Assessing .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happening     ↓  

Highlight: Notification regarding GST rate for branded cereal, pulses and flour

News: Notification regarding GST rate for branded cereal, pulses and flour

Highlight: Anti-dumping duty on import of bus/truck tyres from China

Highlight: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Non-payment of service tax - maintenance and repair charges - appellants had knowingly and deliberately shown the repair charges as job work charges to mislead about their taxability - demand confirmed.

Highlight: BAS - execution of the project of smart card for vehicle registration – implementing the SOC-VRC project - The fact that the Government has outsourced some part of the work and paid certain consideration for such outsourced work, does not make the activity subject to service tax.

Forum: Input tax credit

Forum: Cess paid instead of SGST

Forum: Excise duty credit on finished stock at additional place of business.

Circular: Amendments in Hand Book of Procedures 2015-20 –reg.

News: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Constitution of National Anti-profiteering Authority (NAA) under GST-reg. - Trade Notice

Highlight: Amendments in Hand Book of Procedures 2015-20 –reg. - Various amendments are made in Chapter-4 of Hand Book of Procedures 2015-2020.

Forum: GST rates on mobile recharge business

Circular: Constitution of National Anti-profiteering Authority (NAA) under GST-reg.

Forum: import purchase

Highlight: Sharing of expenses - BAS - promotion of business of group companies - sharing of expenditure for common facilities cannot be treated as service by one to another in such arrangement.

News: RBI Reference Rate for US $

Forum: 3B mistake

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

Circular: Certain Clarifications sought on Construction Services provided in the Real Estate Sector – reg.

News: Anti-dumping duty on import of bus/truck tyres from China

News: Fast-track GST refund, else ₹ 65K cr may be stuck: Exporters

Highlight: It is open to the Settlement Commission to use best judgment in arrival of the figure. Nonetheless it has to explain the manner in which the best judgment figure has been arrived at by the Settlement Commission - HC

Highlight: Deemed dividend u/s 2(22)(e) - advances given to societies - in the absence of legal right of the assessee in the said society the amount advanced cannot be treated as deemed income.

Highlight: When electrical installations are treated as plant and machinery the depreciation has to be allowed @ 25% as per provisions contained u/s 32

TMI Note: Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassment to the honest tax payers

Highlight: Option to avail composition scheme under GST by electronically filing an intimation in FORM GST CMP-02 and FORM GST ITC-03 upto 30-9-2017 - See Rule 3(3A)

TMI Note: Does ICDS apply for the purposes of computing exemption u/s 11 to 13.

Highlight: Voluntary Reporting of Estimated Current Income and Advance Tax Liability - CBDT issues draft notification

TMI Note: Certain ICDS provisions are inconsistent with judicial precedents. Whether these judicial precedents would prevail over ICDS.

Highlight: Provisions of ICDS shall prevail w.e.f. AY 2017-18 to the transactional issues dealt therein over earlier judicial pronouncements.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

News: Voluntary Reporting of Estimated Current Income and Advance Tax Liability

TMI Note: In case of conflict between ICDS and other specific provisions of the Income-tax rules, 1962 governing taxation of income like rules 9A, 9B etc. of the Rules, which provisions shall prevail.

TMI Note: Does ICDS apply to computation of Minimum Alternate Tax (MAT) u/s 115JB of the Act or Alternate Minimum Tax (AMT) u/s 115JC of the Act.

TMI Note: Where a term has not been defined under ICDS, nor under the Act, but has different interpretations given to it by the courts in tax cases, and in ICAI Accounting Standards, which interpretation would prevail while interpreting ICDS.

TMI Note: Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation avoidance agreement (DTAA).

TMI Note: In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, which would prevail over the other.

TMI Note: ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific disclosures. Where is the taxpayer required to make such disclosures specified in ICDS.

Notification: Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18

News: RBI Reference Rate for US $

Highlight: GST - Detention of goods under transport - discrepancy in documents - the statutory provisions provide a mechanism for adjudication following detention of goods including for the provisional release thereof pending adjudication - HC

Highlight: Reassessment - first few paragraphs of the assessment order dealt with objections and disposed of accordingly - Unfortunately, the manner in which the AO has decided the issue is wholly unsustainable in law - HC

Highlight: Business expenditure u/s 37 - liquidated damage - breach of contract terms - Expenditure was not incurred for any purpose which is an offence or which is prohibited by law - cannot be disallowed - HC

Highlight: Valuation - inclusion of reimbursement of expenses - managing participation of clients in certain mela, fairs, promotional activities etc. - They are liable to service tax on the gross amount received - They cannot restrict their tax liability to only agency commission

Highlight: TDS liability - ITAT confirmed the liability - We do not see how it is possible for us to uphold the order of the Tribunal and when it purports to decide two Appeals of the Revenue by single paragraph conclusion - HC

Highlight: Reopening of assessment - sufficiency of material available with the AO to form a belief that income chargeable to tax had escaped assessment - bogus purchases - seller refused to respond - notice would not be interfered with - HC

Highlight: Exemption u/s 11 - education activities - transport and hostel facilities surplus cannot be considered as business income of the assessee society

News: Draft Notification for insertion of new rule 39A in the Income-tax Rules, 1962 – comments and suggestions-reg.



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version