9911796707
TMI Blog1981 (2) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany had advanced interest free loans to its directors and shareholders amounting to Rs. 2,46,251. The assessee was asked to explain as to why interest free loans were given to the directors and shareholders while they themselves were making borrowals from the market. It was explained to the ITO by the assessee that the interest free loans were advanced to the directors and shareholders as a sort of compensation in lieu of remuneration. It was urged before the ITO that advancing interest free loans are small facility to the directors who had account with them. This plea was not accepted by the ITO for the asst. yr. 1976-77. He charged the dues at 18 per cent of Rs. 2,46,251 for the asst. yr. 1977-78. The ITO made similar disallowance of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a person in charge of the company even though he has a 25 per cent has been allowed to divert funds for his personal purpose and that in respect of such funds such a person is not charged interest because he is in the driver's seat and if this is to be accepted it would mean that a person is able to utilise income without payment of tax. In this background I upheld the ITO's action. As regards the rate of interest I find merit in Mr. Mehta's submission. Thus, according to him it will be proper to consider the net average debit balance in Chandarana's two accounts for the two years under consideration. On that basis I find that the net average debit balance in Chandarana's account respectively, is Rs. 1,45,719 and Rs. 1,26,303 at the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action of the Commr. (Appeals) was justified. 5. We have considered the rival contentions advanced by both the sides. It is not denied by the Department that Shri Anil Chandarana had rendered services to the assessee company and played a dominant role in its affairs. If this is accepted as also the fact that he was not remunerated by the company, the assessee's plea that this small facility was given to the director on the grounds of commercial expediency cannot just be brushed aside. It would be open to the ITO assessing Shri Anil Chandarana to take this fact into account in his individual assessments. So far as these appeals are concerned, it stands to reason that the facility extended by the company to Shri Anil Chandarana in list of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
