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TMI Blog2019 (2) TMI 1862X X X X Extracts X X X X X X X X Extracts X X X X ..... ed dividend in the hands of M/s. TIPL. However, the contention of the ld. Counsel that it result in double taxation in the hands of both cannot be accepted, as in the present case, what was disallowed was only the interest claim. Thus, the appellant had failed to establish the business expediency in advancing the money to the holding company. The onus always will be on the assessee to satisfy the AO that the loans raised by the appellant were used for its business purpose. Failure to discharge his onus would result into the disallowance of interest claim as held by the Hon ble Punjab Haryana High Court in the case of Abhishek Industries [ 2006 (8) TMI 123 - PUNJAB AND HARYANA HIGH COURT ] - Decided against assessee. - Shri N.R.S. Ganesan, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed to appreciate that the transaction of advance to M/s Thiruvengadam Investments P Ltd. was for commercial consideration and not for any other purpose and hence ought to have appreciated that the joint development agreement in relation thereto was not taken into consideration in proper perspective so as to understand the nature of advance. 6. The CIT (Appeals) failed to appreciate that in any event the balance sheet of the Appellant company was not analyzed/understood properly and ought to have appreciated that there was no diversion of borrowed funds on the facts and in the circumstances of the case. 7. The CIT (Appeals) failed to appreciate that the misreading of the decisions cited and relied upon to sustain the disallowance of inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the joint development agreement entered between the TIPL in terms of which the land shall develop Hansa Chitra Project and the profit and loss arising on account of this project would be shared equally between the appellant and the M/s. TIPL but, the AO had not accepted the above submission on the following actions: a) M/s. Tiruvengadam Investments Pvt. Ltd. had borrowed loans for acquisition of the land for the joint development project. b) There is not necessity of paying any money to the said M/s. TIPL in terms of joint development agreement and there was no business expediency. The AO calculated the interest @ 15.56% on the outstanding loan amount and the AO disallowed interest to the extent of ₹ 2,09,24,549/-. 4. Being aggrieved, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d between the appellant and the said company came to be rejected by the lower authorities because inability of the appellant to substantiate the same. Even, before us the same arguments were reiterated. We have also perused the joint development agreement entered between appellant and the said M/s. TIPL, wherein we do not find any stipulation that appellant has to pay interest free advances to the said company. Furthermore, the said joint development agreement is not a registered document. It is also a matter of record that the said payment was treated as a deemed dividend in the hands of M/s. TIPL. However, the contention of the ld. Counsel that it result in double taxation in the hands of both cannot be accepted, as in the present case, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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