Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2019 (5) TMI 343

t and ₹ 7,62,94,157/- by way of depreciation during the year under consideration is also evident on record. During the assessment year 2011-12, the assessee has not given any advance to the land lords but in the earlier years advance of ₹ 25,89,060/- was paid out of the total interest free funds available with the assessee. Further the entire borrowing is term loan against capital assets, thus, the borrowing is used for the purpose of business and therefore, the question of disallowance does not arise in term of the ratio laid down in the matter of Taparia Tools Ltd-vs-CIT [2015 (3) TMI 853 - SUPREME COURT]. In that view of the matter, we find no justification of the addition made by the authorities below. Hence, the same is del .....

X X X X X X X

Full Text of the Document

X X X X X X X

dabad for the Assessment Yea₹ 2011-12 & 2012-13. Ground No.1 2. At the time of hearing of the instant appeal the Learned Advocate appearing for the assessee did not press this ground. Hence, the same is dismissed as not pressed. Ground No.2 3. The second ground relates to confirming the addition of ₹ 2,58,906/- u/s 36(1)(iii) of the Act on the ground that the assessee has not able to proved the nexus between interest free funds and interest free advances. 4. During the financial year under consideration, the assessee has advanced ₹ 25,89,060/- interest fee for land. A show-cause notice dated 21.10.2013 was issued as to why the amount of ₹ 2,58,906/- i.e. 10% of the above interest should not be added to the total .....

X X X X X X X

Full Text of the Document

X X X X X X X

loans taken and given during the year. Whatever loans we have given are out of our own fund which is interest free. Over and above, we have also taken ₹ 1,35,00,000/- as interest free loans along with opening Balance ₹ 5,99,85,074/-. Out of which we had re-paid ₹ 77,00,000/- lacs balance remaining at the year end ₹ 6,57,85,074/-. During the Fin. year 2011-12, we have not given any advance to the land lords, but in earlier years, we have made advance of ₹ 25,89,060/- i.e. out of total Interest free funds. So question of charging any notional interest thereon is not arise. (PL Ref. Gauhati High Court in the case of Highways Construction Company Limited Vs. CIT reported at 199 UK 702 has held that there is no comp .....

X X X X X X X

Full Text of the Document

X X X X X X X

s not earned income, notional income cannot be charged to tax. Ref -2 CIT Vs. Chelladurai reported at 204 Taxmann 258 (Mad). (Copy of Case Laws are attached). Hence disallowance of Inerest exp byAO have not direct nexus and is illegal. We have enough interest free funds inform of Unsecured Loans and we have received ₹ 2,70,72,093/- as advance for assets in preceding years. Out of which we have given advance on for ₹ 25,89,060/- Looking to above, we have not made any addition to advance for land; hence we have not used any fund for advance for land during the year. We have made used funds for Adv. for agriculture land ₹ 25,89,060/- in preceding financial years out of balance of ₹ 2,70,72,093/- as advance received for .....

X X X X X X X

Full Text of the Document

X X X X X X X

n interest free unsecured loan of ₹ 6,15,94,678/- in preceding years. The internal cash accrual of ₹ 87,84,446/- as profit and ₹ 7,62,94,157/- by way of depreciation during the year under consideration is also evident on record. During the assessment year 2011-12, the assessee has not given any advance to the land lords but in the earlier years advance of ₹ 25,89,060/- was paid out of the total interest free funds available with the assessee. Further the entire borrowing is term loan against capital assets, thus, the borrowing is used for the purpose of business and therefore, the question of disallowance does not arise in term of the ratio laid down by the Hon ble Apex Court in the matter of Taparia Tools Ltd-vs-CIT .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||