9911796707
TMI Blog2002 (7) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounting year of the assessee?" The assessment year is 1984-85 and the relevant accounting period is the calendar year 1983. The assessee, a public limited company is a wholly owned subsidiary of Jyoti Limited. The assessee-company debited an amount of Rs. 11,49,206 on December 31, 1983, as interest payable to Jyoti Limited. The Assessing Officer disallowed the claim holding that no interest had been charged prior to the calendar year; that Jyoti Limited had agreed not to charge any interest for the next year; the assessee being a subsidiary of Jyoti Limited was more or less under the effective control of management of Jyoti Limited; in the absence of any written agreement there was no contractual obligation on the assessee-company to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit making company. Thus, the Tribunal has ruled out any tax planning in the light of the facts available on record. Accordingly, the Tribunal has held that the assessee was entitled to the deduction of interest payment. "1. The Tribunal has further held that the claim for interest payment is for the period commencing from July 1, 1982 to June 30, 1983 and then from July 1, 1983 to December 31, 1983. The Tribunal has therefore held that even though Jyoti Limited had passed a resolution calling upon the assessee to pay interest for the aforesaid period interest attributable to the period between July 1,1982 and December 31,1982, does not pertain to the previous year relevant to the assessment year of the assessee-company and hence intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution passed by Jyoti Limited on November 18, 1983, is during the accounting period relevant to the assessment year under consideration. Therefore, to say that Jyoti Limited, can call upon the assessee to pay interest only with effect from November 18, 1983, and not between January 1, 1983 and November 17, 1983, is an incorrect proposition which cannot be accepted. The fact that Jyoti Limited did not treat the outstanding amount from the assessee-company as a loan in its books up to June 30, 1983 is wholly irrelevant to the issue. Admittedly, on June 30, 1983, when the accounting period of Jyoti Limited ended, Jyoti Limited had shown outstanding amount in its books of account as outstanding loan from the assessee-company. This date, na ..... X X X X Extracts X X X X X X X X Extracts X X X X
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