9911796707
TMI Blog2011 (11) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... short-term capital loss (STCL). 2.1 The facts are that the assessee-company held 1,57,937 shares of Haldiram Snacks (P) Ltd., which were sold @ ₹ 15/- per share. The assessee incurred loss of ₹ 33,30,913/- in the transaction. It was submitted that the shares were sold @ ₹ 15/- per share against the breakup value of ₹ 18/- per share. The breakup value had been worked out on the basis of balance-sheet of the company as on 31.03.2005. This is a closely held company and, thus, the shares are not freely traded in the market. In view of this difficulty, the shares were sold @ ₹ 15/- per share. The ld. CIT(Appeals) considered the facts and submissions made by the assessee. It is mentioned that these shares have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (P) Ltd. were sold to a sister concern @ ₹ 15/- per share. The transaction resulted in loss of ₹ 33,30,913/-. The breakup value of the share was ₹ 18/- per share against the sale price of ₹ 15/-. The AO adopted the sale price at ₹ 18/- per share. This resulted in reduction of the loss by an amount of ₹ 4,73,811/-. The ld. CIT(Appeals) confirmed this finding by inter-alia mentioning that the justification for sale price has not been provided and the transaction is with a related party. We have already provided the summary of the decision in the case of Rupee Finance Management (P) Ltd. (supra). While coming to the decision, the Tribunal has considered a number of decisions including in the case of K.P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged and paid on the aforesaid loans at ₹ 16,11,254/-. This amount was disallowed on the ground that borrowings taken at higher rate of interest were diverted to a sister concern at lower rate of interest. It was submitted that various companies of Haldiram group are carrying on the business of manufacture and sale of sweets and namkeens. All these companies have their retail outlets in which products manufactured by various companies are sold. The assessee manufactures some products, which are sold to other group companies which do not manufacture such products. The assessee availed of working capital facility from State Bank of Bikaner Jaipur, in which interest is paid @ 9.5% p.a. on the overdraft, which is mainly taken during fes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been wholly and exclusively used for the purpose of business, the revenue authorities cannot go into necessity or reasonableness of the expenditure. The ld. CIT(Appeals) further came to the conclusion that the money was advanced in the course of business and, therefore, charging of lower rate of interest cannot be the basis for disallowing a part of interest paid to the bank. 3.2 Before us, the ld. DR referred to the orders of the lower authorities. It is mentioned that the CC A/c is in the nature of a mixed account where all receipts and outgoings are credited and debited. In this account interest is paid @ 9.5%. However, the assessee has charged interest from the sister concern on the advances made from this account @ 7.5% and 8.5% ..... X X X X Extracts X X X X X X X X Extracts X X X X
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