9911796707
TMI Blog2023 (2) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the order u/s 143(3) passed by Additional CIT, Special Range 05, New Delhi (hereinafter referred to as the "Ld. Act") dated 9.12.2016 was dismissed and the order of Ld. AO was upheld. 2. The brief facts are assessee had filed return of income of Rs. 35,93,33,030/-. The assessee company is a General sales Agent of various International and domestic airlines for their passengers and cargo sales and is entitled to GSA commission from these Airlines. Notice u/s 143(2) of the Act was issued followed by another notice u/s 142(1). The assessee company had for the assessment year 2014-15 shown loans to body corporate to the tune of 25.95 crores. The Assessing Officer had called assessee to explain commercial expediency of equity investment and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets, investment and debter and that is business activities. It thus, rejected the argument that the funds were lend to the subsidiaries out of surplus funds and went on to make addition, disallowing 60% of the interest and guarantee changes of Rs. 39,31,000/- amounting to Rs. 23,58,600/- adding it to the assessed income. 6. Assessee had challenged the same before the Ld. First Appellate Authority. It was specifically pointed by assessee before the Ld. First Appellate Authority that the disallowance of expenses on account of finances cost had also arisen in the appellant in case in the assessment year 2010-11 to 2013-14 and that Ld. CIT(A), New Delhi had sustained the submissions of assessee and deleted the entire additions. In para no. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant, as the observations made by the AO in the assessment order are found to be convincing." 7. Now before the Tribunal assessee has raised following grounds of appeal :- "Ground No. 1 The Ld. Commissioner of Income Tax (Appeals) - 36, New Delhi {hereinafter referred to as 'Ld. CIT(A)'}, has erred in law and on the facts and in the circumstances of the case in upholding the various additions / disallowances made in the Assessment Order dated 09.12.2016. Ground No. 2 The Ld. CIT(A) has erred in law and on facts and in the circumstances of the case in confirming the addition of Rs. 23,58,600/- under the head 'Interest Free Loans and advances given to subsidiaries' u/s 36(1 )(iii) of the I.T. Act. Hence, the appellant prays tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years. "1) CIT v Sridev Enterprises [192 ITR 165 (Kar)] 2) CIT v. Industrial Cables (India) Ltd [209 CTR 167 (P&H)] 3) Escorts Ltd. v. ACIT [104 ITD 427 (Del)] 4) Malwa Cotton Spg. Mills v. ACIT [89 ITD 65 (TM)(Chd)] 5) ITO v. J.M.P. Enterprises [101 ITD 324 (SMC)(Asr)] 6) Sushee Hi Tech Construction Pvt. Ltd. v. DCIT (33 taxman.com 236) (Hyd) 7) Virendra R. Gandhi v. ACIT (Tax Appeal No. 20 of 2004 with Tax Appeal No. 124 of 2005) dated 27.11.2014 (Gujarat High Court)" 10. Ld. Sr. DR took the Bench through the findings of ld. AO and Ld. First Appellate Authority supporting and standing by them. 11. On appreciation of the contentions and matter on record it can be observed that in para no. 3 of its order, the Ld. AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e advance tax liability and the profits were deposited in the over draft account of the assessee and in such a case it should be presumed that the taxes were paid out of the profits of the year and not out of the overdraft account for the running of the business. It noted that to raise the presumption, there was sufficient material and the assessee had urged the contention before the High Court. The principle therefore would be that if there are funds available both interest free and over draft and/or loans taken, then a presumption would arise that investments would be out of the interest free fund generated or available with the company, if the interest free funds were sufficient to meet the investments. In this case this presumption is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the initial stage when money is lend and there cannot be year to year basis explanation of commercial expediency of giving interest free funds, to its subsidiaries, by assessee. 15. The fact that the revenue appeals stand dismissed in regard to the assessment years 2010-11 to 2012-13 by this Tribunal further, bolsters the findings of this Bench that the question of commercial expediency of the interest free loans attaining finality for previous assessment years, then for the present assessment year of 2014-15, the question of commercial expediency require no further adjudication. 16. That being so, the order of Ld. First Appellate Authority and of the Ld. AO are liable to be set aside. The appeal of assessee is allowed. The Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
