TMI Blog2019 (10) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee funded the capital working requirement. Thus, the advance was made for business expediency. Thus, both the case is based on peculiar facts of those cases and is not applicable on the present case. Therefore, in view of the aforesaid discussion, we do not find any illegality or infirmity in the order passed by lower authorities, which we affirmed.- Decided against assessee. Addition of interest income - year of assessment - HELD THAT:- During the assessment, the assessee was asked to reconcile the entries in Form 26-AS. The assessee filed its reply dated 22.07.2016 wherein the assessee stated that accept the amount as the TDS was received in subsequent F.Y. i.e. F.Y. 2014-15, the assessee offered the same on the basis of accrual basis due to non-availability of exact figure. The Assessing Officer on the basis of details of Form 26- AS made the addition - CIT(A) upheld the action of Assessing Officer holding that the non-receipt of TDS does not holding any ground and confirmed the action of Assessing Officer. We direct the Assessing Officer to verify the fact, if the interest is offered in the subsequent year then the same be deleted from the year under consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, filed its return of income for Assessment Year 2014-15 on 30.11.2013 declaring loss of ₹ 11.27 crore (Approx). The assessee declared book profit was declared at (-) ₹ 10.77 crore. The case was selected for scrutiny. The Assessing Officer while passing the assessment order disallowed write off of ₹ 3.05 crore and addition of ₹ 2,56,445/- on account of interest income. On appeal before the ld. CIT(A), both the additions/disallowance were confirmed. Thus, further aggrieved by the order of ld. CIT(A), the assessee has filed the present appeal before this Tribunal. 3. We have heard the submission of ld. Authorized Representative (AR) of the assessee and ld. Departmental Representative (DR) for the revenue and perused the material available on record. Ground No.1 2 relates to disallowance of write off of advances made to subsidiary. The ld. AR of the assessee submits that assessee is one of the pioneer companies in stationary business in India. Initially the assessee-company started its business as a proprietorship firm namely Dandekar Co. in 1946; Camlin Pvt. Ltd. acquired the business of Dandekar Co. as on ongoing concern in 1998, the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de to meet the working capital. Further, the case law relied upon by CIT(A) in DCM Ltd. 9123 TTJ 145 (Del.) is also not applicable on the facts of the present case as in the said case, the loan was given by the assessee to subsidiary company to acquire the share of Joint Venture Partner. Thus, loan was given to enhance the capital base. However, in the present case, the assessee has given advance to its subsidiary to finance its working capital needs and this transaction is of revenue nature. Further, the decision of Bombay Tribunal in Grindwell Norton Ltd. (91 ITD 412 (Bom) is also not applicable on the facts of the present case. In the said case, the loan was given to subsidiary company to earn interest income. However, in the present case, the assessee has given interest free advances. Further, the order of Hyderabad Tribunal in VST Industries (ITA No. 691/Hyd/2005 is also not applicable. In the said case, the advances are not in the course of business of the assessee, however, in the present case, the assessee has established that advances were provide for furtherance of business of the assessee. 6. In support of his submission, the ld. AR of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncurred losses and it became difficult to continue funding the CAL and it was also relied that losses in CAL were deteriorating the assessee s financial position. Looking on the financial position of CAL and assessee, the assessee did not foresee any turn out of business near future. Therefore, the Board of Directors decided to disengage from the activity of advancing and write off of the advances of ₹ 305.32 lakhs. It was further stated that the assessee given advance to CAL for its business and therefore, the write off of such advance is incidental to the business and should be allowed as business loss of commercial expediency either under section 28 29. The reply of assessee was not accepted by Assessing Officer. The Assessing Officer concluded that the assessee has stated in its reply that the advances given to subsidiary to start new business. The business of subsidiary is different from the business of assessee. It was further concluded that advances were given to subsidiary to find its working capital required when external financial aid was difficult for subsidiary. The Assessing Officer further concluded that as per the version of assessee that Board of Director de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort of his submission; however, the ld. AR of the assessee mainly relied upon the decision of Mumbai Tribunal in Jackie Shroff (supra) and Delhi Tribunal in ACIT vs. OSN Infrastructure Projects Pvt. Ltd. (supra). 11. In our view, both the decision are distinguishable on the facts of the present case in Jackie Shroff (supra) case the money was advanced for business expediency, however in the case in hand the assessee funded the capital working requirement of CAL. Further, in ACIT vs. OSN Infrastructure Projects Pvt. Ltd. (supra), the said assessee was engaged in the business of development of infrastructure, construction and real estate trading, advance/ money to various parties to buy land, the said parties failed to buy land and pay money, however in the case in hand the assessee funded the capital working requirement. Thus, the advance was made for business expediency. Thus, both the case is based on peculiar facts of those cases and is not applicable on the present case. Therefore, in view of the aforesaid discussion, we do not find any illegality or infirmity in the order passed by lower authorities, which we affirmed. 12. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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