Bogus donation receipts justified commission income assessment and defeated political-party tax exemption for inaccurate accounts and reporting failur...
Pure reimbursement without income element escapes tax withholding, while delayed withholding and unsupported provisions face deferred or renewed scrut...
Public benefit requirement defeats charitable registration where residents' association services are reciprocal, member-only facilities governed by mu...
Exempt-income expenditure disallowance is confined to investments that actually generated exempt income, while supported business expenses remain dedu...
Disallowance of interest difference between the rate paid on borrowed capital and the rate advanced to a wholly owned subsidiary is not warranted. The Supreme Court in S.A. Builders held that advancing funds by a holding company to its subsidiary for commercial expediency does not warrant disallowance of interest, even if not charged. The Delhi Tribunal in Moonrock Hospitality ruled that where funds were advanced to a wholly owned subsidiary for business purposes, no interest paid on borrowed funds could be disallowed u/s 36(1)(iii) of the Income Tax Act. Following these precedents, the Tribunal held that no disallowance of interest paid on borrowed funds was permissible and directed the Assessing Officer to delete the addition.
Disallowance of interest difference between the rate paid on borrowed capital and the rate advanced to a wholly owned subsidiary is not warranted. The Supreme Court in S.A. Builders held that advancing funds by a holding company to its subsidiary for commercial expediency does not warrant disallowance of interest, even if not charged. The Delhi Tribunal in Moonrock Hospitality ruled that where funds were advanced to a wholly owned subsidiary for business purposes, no interest paid on borrowed funds could be disallowed u/s 36(1)(iii) of the Income Tax Act. Following these precedents, the Tribunal held that no disallowance of interest paid on borrowed funds was permissible and directed the Assessing Officer to delete the addition.
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