9911796707
TMI Blog2025 (2) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... unsustainable primarily because the petitioner has made adequate declarations not only in the returns filed by the petitioner on 29.09.2013 which accompanied the balance sheet, profit and loss account. Even though the assessment order dated 29.06.2015 has not discussed all the points that were raised before the assessment was completed, the information obtained by the petitioner under RTI which was narrated above and indicates that the assessing officer formed an opinion regarding the interest free loans to group company. Thus, was true and full disclosure of all intimation by the petitioner along with the return filed by the petitioner on 29.07.2021. The information available on file particularly the information secured by the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 29.07.2021, the objection has been overruled with the following observation: "It is clear from the above provisions that though the scrutiny assessment had already been made and the income chargeable to tax has been under assessed or assessed at too low a rate, the assessment can be re-opened. In this case, it was found from the records that scrutiny assessment u/s. 143(3) was completed on 29.06.2016. Though the assessee company had given loans to related concerns without any interest receipts, it had claimed interest to the extent of Rs. 13,20,36,536/- on borrowed funds of Rs. 100,66,54,245/- and hence interest claim of the assessee should be proportionately disallowed u/s. 36(1)(iii) r.w.s 37(1) of Income-tax Act, 1961. Durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other evidences in support of loans and advances given to sister/related concerns during the course of assessment proceedings. In the above circumstances, objections filed by the assessee are rejected." 4. Learned counsel for the petitioner would submit that the reopening of the assessment is contrary to the proviso of Section 147 of the Income Tax Act, 1961 as it is prior to 01.04.2021. Specifically, learned counsel for the petitioner would submit that despite adequate disclosure by the petitioner in the Return of Income dated 29.09.2013 in the form of Balance Sheet, Profit and Loss Account regarding the interest free loan given to the Group of Companies, the Department has invoked power and under Section 148 of the Income Tax Act ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expediency of the business. The balance outstanding has not exceeded free reserves of the company during the year. Further, the company had reserves and surplus to the extent of Rs. 1,11,45,00,000/- which was sufficient to cover the loan amount of Rs. 6,72,80,528/-. Hence, the short term loans and advances given to sister concerns which was made out of from free reserves only and therefore question of disallowance of interest u/s. 36(1)(iii) does not arise. The relevant extract is reproduced below: "The assessee's transactions of giving interest free loans to sister concerns as because of commercial expediency of the business. The balance outstanding has not exceeded free reserves of the company during the year. Further, the company h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43(3) on 29.06.2015. Even though the assessment order dated 29.06.2015 has not discussed all the points that were raised before the assessment was completed, the information obtained by the petitioner under RTI which was narrated above and indicates that the assessing officer formed an opinion regarding the interest free loans to group company. Thus, was true and full disclosure of all intimation by the petitioner along with the return filed by the petitioner on 29.07.2021. 11. The information available on file particularly the information secured by the petitioner under RTI clearly indicates that the invocation of Section 148 read with Section 147 of the Income Tax Act was unwarranted. The officer has also justified the conclusion arrived ..... X X X X Extracts X X X X X X X X Extracts X X X X
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