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 →

Lalbhai Realty Finance Pvt. Ltd. Versus ACIT, (OSD) -1, Range-4, Ahmedabad

Disallowance of deduction for interest paid by the assessee on its borrowing from HDFC Bank - advancing money for purchase of property - nexus with business - Held that:- The objects in the Memorandum of Association are clearly in favour of the impugned transaction and establish a direct nexus between the business of the assessee and the advancing of money. Our view is also fortified with the financials of the assessee in as much as in the Balance Sheet under the Head “Stock-in- trade” there is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

bservations clearly show that the revenue authorities have grossly erred in not accepting assessee’s contention that is one of the businesses is in real estate. The Tribunal in the first round of litigation has directed the assessee to establish direct nexus between the advancing of money to SSKI and its commercial expediency. In our understanding of the fact, as mentioned elsewhere, the assessee has successfully discharged its onus and has complied with the directions of the Tribunal. We set as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

)-VIII, Ahmedabad dated 07.08.2012 pertaining to A.Y. 2002-03 & 2003-04. Both these appeals have common grievance on identical set of facts; therefore, these appeals are disposed of by this common order for the sake of convenience. 2. The common grievance in both these appeals relate to the disallowance of deduction for interest paid by the assessee on its borrowing from HDFC Bank. 3. In this case, the return of income for A.Y. 2002-03 was filed on 02.12.2003; the return was selected for scr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eceived on 27.11.2001 was given as loan/advance to SSKI on the very same date. 4. The assessee was asked to explain the purpose of the loan/advance made to SSKI along with the interest charged from it. The assessee explained the nature of transaction vide letter dated 27.02.2006 claiming that the advance is made out of the interest free funds available with the assessee. 5. This contention of the assessee did not find favour with the A.O who was of the firm belief that the assessee has utilized .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

commercial expediency or not. 7. Pursuant to the directions of the Tribunal, fresh notices were issued and served upon the assessee. The assessee was asked to explain the claim of interest in the light of the directions of the Tribunal. 8. Assessee categorically stated that it has approached M/s. SSKI to jointly develop the project at Mumbai which proposal was accepted by SSKI and it was mutually decided between them to utilize their financial resources, man power and experience so as to develo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

reafter, the A.O simply incorporated the findings from the original assessment order, and once again, the interest expense of ₹ 77,35,960/- in A.Y. 2002-03 & ₹ 1,16,40,385/- in A.Y. 2003-04 were disallowed. The only reason given by the A.O for the disallowance is that the main business of the assessee is of finance and leasing, hire, purchase, invest to assist or subsidizing in purchasing of industrial and office plant, equipments machinery, vehicles movable assets, land & bu .....

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 has been stated during the first round of litigation in the present assessment proceedings/appellate proceedings. The ld. counsel vehemently stated that there is a direct nexus between the business of the assessee and the advancing of money to SSKI. The ld. counsel drew our attention to the object clauses in the Memorandum of Association of the company. It is the say of the ld. counsel that the lower authorities have simply disregarded the other objects of the company and have grossly erre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on it by the directions of the Tribunal in the first round of litigation. Therefore, there is no error/infirmity in the findings of the First Appellate Authority. 13. We have given a thoughtful consideration to the findings of the authorities below. We have also carefully perused the directions of the Tribunal given in the first round of litigation. There is no dispute in so far as the finding of the Tribunal is concerned. All that is to be considered is whether the assessee had successfully est .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, movable assets, land and building, real estates and consumer goods of all kind by way of leasing, hire purchase. 15. However, we find that clause 4 is very relevant for the understanding of the impugned transactions, which reads as under:- To carry on the business of financiers, for purchase of property, lent or advance money on the security of movable or immovable property, takeover of stock units, legal claims, chose in action or other such rights and assets in financing the business underta .....

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 Happenings     ↓  

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