TMI Blog2016 (9) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... e funds were available and that the funds had also been borrowed by the Ludhiana Unit from financial institutions on interest. The CIT (Appeals), accordingly, adopted the approach of finding out the ratio of the borrowed funds to the interest-free funds. It was found that as per the balance-sheet as on 31.03.2008, about 43 per cent of the capital constituted the interest-free reserves amounting to about ₹ 48.6768 crores, whereas, the borrowed funds constituted 57 per cent of the available funds aggregating to about ₹ 65.35 crores. He, accordingly, apportioned the amounts in respect of the three units depending on the amounts advanced by the Ludhiana Unit to each of them. The ITAT upheld this decision. The approach of the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see had transferred followed funds to the eligible units for the purpose of inflating profits to avail more deduction u/s 80-IB in these units? (ii) Whether on the facts and circumstances of the case, the Hon ble Income Tax Appellate Tribunal was right in law in upholding the decision of ld. CIT(A) deleting the addition of ₹ 14,34,018/- made by the AO on account of advances to sister concerns while the Assessee is paying more interest on borrowed funds and hence the judgment of Hon ble Punjab Haryana High Court in the case of CIT vs. M/s Abhishek Industries Ltd. 286 ITR1 (P H) is fully applicable in this case? (iii)Whether on the facts and circumstances of the case, the Hon ble Income Tax Appellate Tribunal was right in law in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from which the funds have been transferred to the Samba Unit had sufficient interest-free funds and reserve funds for the purpose of investing in the three Samba Units. The Assessing Officer applied a rate of 12% towards interest on the funds advanced by the Ludhiana Unit to the three Samba Units and computed the amount accordingly. 4. The CIT (Appeals), however, agreed with the Assessing Officer to the extent that if funds borrowed on interest by the Ludhiana Unit have been transferred to Samba Units, the interest on the same should be debited to the Profit and Loss Account of the Samba Units only. Having said so, however, the CIT (Appeals) held that the assessee could only make a claim that such transfers were from self-generated fun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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