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2014 (7) TMI 1038 - ITAT AHMEDABADDisallowance out of interest expenses – Business funds diverted to non-business purposes – Held that:- Assessee was having interest free funds in the form of Share Capital and Reserves aggregating to ₹ 10.79 crores and the advance for purchase of land was ₹ 4.15 crores – following the decision in The Commissioner of Income Tax Versus Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - HIGH COURT BOMBAY] - if there are funds available both interest free and over drafts and/or loans taken, then a presumption would arise that the investments would be out of the interest free funds generated or available with the company, if the interest free funds were sufficient to meet the investments – assessee submitted that the land was purchased out of the amount that was advance to A.D Gravures in earlier years - Assessee had charged interest from A.D. Gravures and the interest was assessed as business income - CIT(A) has deleted the addition – there is no reason to interfere with the order of CIT(A) – Decided against Revenue.
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