Revenue neutrality in domestic related-party loans can require deletion of interest transfer pricing adjustments after domestic-transaction verificati...
Pre-enactment land-sale agreements escape stamp-duty value substitution where substantial banking-channel consideration was received before Section 43...
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The ITAT held that interest paid under Section 50(3) of the GST Act is compensatory, not penal, and thus deductible under Section 37(1) of the Income Tax Act. The disallowance of such interest by the AO and CIT(A) was set aside. Regarding disallowance under Section 36(1)(iii) for interest on advances, the Tribunal found no established nexus between borrowed funds and interest-free advances, relying on the presumption that advances were made from interest-free funds supported by financial statements. The AO's reliance on statements without proper fund tracing was insufficient. Consequently, the disallowance under Section 36(1)(iii) was also deleted.
The ITAT held that interest paid under Section 50(3) of the GST Act is compensatory, not penal, and thus deductible under Section 37(1) of the Income Tax Act. The disallowance of such interest by the AO and CIT(A) was set aside. Regarding disallowance under Section 36(1)(iii) for interest on advances, the Tribunal found no established nexus between borrowed funds and interest-free advances, relying on the presumption that advances were made from interest-free funds supported by financial statements. The AO's reliance on statements without proper fund tracing was insufficient. Consequently, the disallowance under Section 36(1)(iii) was also deleted.
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