TMI Blog2018 (5) TMI 2093X X X X Extracts X X X X X X X X Extracts X X X X ..... 36(i)(iii) - giving loans to sister concerns at low interest - Proof of business expediency - AO observed that during the year it had obtained term loan on which the assessee had paid interest @ 11% to the bank. However, the assessee during the year had also given loan / advance to its sister concern and charged interest @ 8% - HELD THAT:-We find that the case of the assessee is thus squarely covered by the aforesaid decisions of the Hon'ble Supreme Court in the case of Hero Cycles P. Ltd v CIT [ 2015 (11) TMI 1314 - SUPREME COURT ] and Bright Enterprises Pvt Ltd Vs. CIT [ 2015 (11) TMI 342 - PUNJAB HARYANA HIGH COURT ] and Reliance Utilities and Power Ltd. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT ] wherein the Hon'ble Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of Investment activity, done by the company as adopted after demerger scheme. b) That the Worthy CIT(A)-4, Ludhiana, has further, erred by not directed the Assessing Officer to capitalize the expenses disallowed, when the project of BOPP films starts. 2. That the Worthy CIT(A)-4, Ludhiana, erred in law and on facts in not deleting the disallowance of ₹ 3,66,531/- made on account of proportionate interest, accounted for in the head Expenses pending Capitalization in spite of the fact that the amount of term loan raised was fully utilized in purchase of assets for new Unit. Directions may be given to the A.O. not to reduce any amount of interest paid to banks as the amount was paid to the party out of its own funds. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance made by the Assessing officer at ₹ 3,66,531/- which came out at ₹ 98,963/- and restricted the disallowance to that extent. 6. Before us, Ld. Counsel for the assessee has submitted that the assessee had own reserves and surpluses of 142 crores whereas the amount advanced during the year was only ₹ 3 crores and that the amount was advanced out of the said interest free reserves and surpluses. The Ld. Counsel has further submitted that the amount of term loan was utilized by the assessee for purchase of capital assets and was not diverted for loan to sister concern. He further submitted that even otherwise the assessee has its own reserves and surpluses much more than the aforesaid advance and has relied upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
