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2023 (5) TMI 545 - AT - Income TaxDisallowance of Long Term Capital Loss - HELD THAT - We find that CIT(A) while upholding the order has given a finding that assessee could not reconcile the investment in equity shares as claimed by it and as shown to have been purchased by it. CIT(A) has further given a finding that assessee has also failed to furnish evidence in support of year of acquisition of shares as well as value of shares in the year of acquisition. Before us, also assessee has not placed any material on record to controvert the findings of lower authorities. In such a situation, considering the fact that CIT(A) for the reasons noted in the order and reproduced herein above, we find no reason to interfere with the order of CIT(A) thus the ground of assessee is dismissed. Disallowance of interest on Inter Corporate Deposits - AO noticing maximum outstanding interest free debt worked out the interest @ 13% (being the interest paid on Inter Corporate Deposits) and worked out the interest at Rs.6,41,542/- being not for the purposes of business and disallowed the same - HELD THAT - CIT(A) while upholding the order of AO has given a finding that no details were furnished by assessee about the amount the money being lent except stating that debts are regular business debts given to Escorts Finance Ltd. CIT(A) has further noted that assessee had also failed to establish that assessee had substantial interest free funds from which interest free advances were given. Before us, also assessee has not placed any material on record to demonstrate any fallacy in the findings of CIT(A) nor has placed any material on record to demonstrate that the amount which is stated to have been lent to Escorts Finance Ltd. is a regular business debts and lent out in earlier years. Considering the totality of the facts, we find no reason to interfere with the order of CIT(A) and thus the ground of assessee is dismissed.
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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