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2023 (5) TMI 545 - AT - Income Tax


Issues Involved:
The judgment involves the disallowance of long-term capital loss and the addition of notional interest on dues receivable from a party.

Long-Term Capital Loss Disallowance:
The appellant, an investment company, filed its return of income for A.Y. 2003-04 declaring total income. The AO disallowed the Long Term Capital Loss claimed by the appellant on shares of Escorts Ltd. due to lack of proof regarding the year of acquisition and value of shares. The CIT(A) confirmed the disallowance citing discrepancies in the appellant's account of shares. The Tribunal upheld the CIT(A)'s decision as the appellant failed to provide evidence to counter the findings of the lower authorities.

Notional Interest Addition:
The AO disallowed notional interest on dues receivable from a party as inter-corporate deposit, calculating the interest based on the maximum outstanding amount. The CIT(A) upheld the disallowance, stating that the appellant failed to establish the business necessity of giving interest-free inter-corporate deposits. The Tribunal affirmed the CIT(A)'s decision, noting the lack of details provided by the appellant about the nature of the debts and the absence of proof regarding substantial interest-free funds for such advances.

Conclusion:
The Tribunal dismissed the appeal of the appellant after considering the arguments and findings of the lower authorities. The judgment was pronounced on 09.05.2023.

 

 

 

 

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