9911796707
TMI Blog2016 (8) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... ss has not started Allowability of carry forward of loss - Held that:- Not allowing to carry forward of loss suffered after November 7, 1990 as the business of real estate had been commenced thereafter, in this regard it is required to be noted that activity of the construction has been started after taking title from the Bank and payment was made after approval and new activity was started from the date when they have cleared all the dues and this fact is clearly established from the letter issued by the Bank dated April 16, 1987. Thus, the tribunal has committed an error and we accordingly answer this question in favour of assessee and against the revenue. Disallowance of interest paid to the Directors - Held that:- We are of the op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order was passed, it has been held by the A.O. that the appellant is not entitled to claim of set off of carry forward of loss of the old business against the new business as the new business has not started. The A.O. while passing the assessment order made some additions and has not allowed interest and administrative expenses and also made addition on the ground of short term capital gain. 2.2 The appellant carried the matter before the CIT(A), who set aside the assessment with a direction to the AO to recompute the taxable income after finding out the income and expenditure between mutual and nonmutual activities of the appellant. 2.3 Aggrieved by the order of CIT (A), the appellant preferred an appeal before the ITAT which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and further contended that in view of the decision of the Hon ble Supreme Court in case of Commissioner of Income-Tax v. Bokaro Steel Ltd., [236 ITR 315] the accrual of income and principle of real income can replace. 4.1 Learned Counsel for the appellant has also taken this Court to the arrangement which has been arrived between the company and the Bank on 16/04/1981 whereby the Union Bank of India has agreed to in full and final settlement of total due of ₹ 110.00 Lacs on 30/12/1986. 4.2 Learned Counsel for the appellant has relied upon the following decisions in support of his case: 1. Veecumsees v. Commissioner of Income-Tax 220 ITR 185 . 2. Commissioner of Income-Tax, GujaratII v. Alembic Glass Industries Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l appearing for the respective parties. 7. So far as the question No.1 paused for our consideration is concerned, looking to the facts on record and in view the fact that amendment in the Memorandum of Article was made, we are of the opinion that the company has utilized its property, which was available in the books of account, as also the company has tried to come out from the gross expenditure and another activity is carried out. However, the nature of business may be different but that would not make the appellant disentitle and therefore the Tribunal has committed an error in holding that old business come to an end and new business has not started. We, accordingly, answer the issue No.1 in favour of the assessee and against the Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have suffered a great loss. Thus, taking into account the fact that since the new activity is for the benefit of the company and loan amount is taken from the Director, the interest of which is required to be paid to the Director, the question is accordingly answered in favour of assessee by allowing payment of interest as expenses under the Act. 11. So far as the issue No.5 is concerned regarding the interest paid to the Director and other expenses incurred during the year are not allowable deductions against other income of the assessee, the answer is already given while dealing with issue No.4 as aforestated and therefore the issue No.5 is also required to be answered in favour of the assessee and against the revenue. 12. According ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
