TaxTMI 
TaxTMI 
TaxTMI 
2006 (1) TMI 207
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.... the tune of Rs. 22.22 lakhs and the surplus funds are Rs. 13.22 lakhs. In another statement also the same figures are shown. This statement shows that the assessee's own funds was more than what it had advanced to the sister concern. Therefore, the question of assessee utilising the borrowed funds for advancing to the sister concern is not correct. 3. For the assessment year 1995-96 also the statement of funds showed the assessee having Rs. 93.36 lakhs surplus funds after advancing funds to sister concern. Therefore, for both the assessment years the assessee had clearly shown that it had funds from which it had advanced money. Therefore, disallowance as part of diversion of borrowed funds is not correct. The disallowance is accordingly deleted. Per Shri N. Vijayakumaran, Judicial Member. - I have gone through the order of the learned Senior Vice-President in the above case. As I am unable to agree with the findings of the learned Senior Vice-President, I proceed to pass my order of dissent in this case. 2. These two appeals are by the assessee. The Assessing Officer disallowed the interest on the ground that borrowed amounts were diverted to the sister concern for which no int....
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....mitted back to the Assessing Officer, the deletion made by the learned Senior Vice-President is not found agreeable to me. I differ on this. The appeals are to be allowed for statistical purposes only. ORDER UNDER SECTION 255(4) OF INCOME-TAX ACT, 1961 1. The appeals, referred to below, were heard by Shri A. Kalyana-sundharam, Sr. Vice President and Shri N. Vijayakumaran, Judicial Member. Shri A. Kalyanasundharam had kept the files with him for dictation of orders. However, orders were not passed till Shri A. Kalyanasundharam was transferred and relinquished his office as Sr. Vice President, Chennai Benches, Chennai. He appears to have sent proposed orders subsequently to the learned Judicial Member for his signatures, who did not agree and has passed dissenting orders. Shri A. Kalyanasundharam is not available for stating the point or points of difference and accordingly learned Vice President, Chennai Zone has sent these files to me. In terms of section 255(4), I frame the points of difference in the five appeals as below and appoint the Zonal Vice President as Third Member, for dealing with cases in accordance with law: 1. I.T-A.Nos. 955 and 1851/Mds./1995 Asstt. Years: 1994....
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....the ground that the assessee had diverted its borrowed funds to its sister concerns without charging any interest. The funds alleged to have been diverted to the following 3 sister concerns are as under: ------------------------------------------------ "1. M/s.P.M.P. Textiles : Rs. 2,84,850 Spinning Mills Ltd. 2. M/s. P.M.P. Steels : Rs. 1,95,000 Pvt. Ltd. 3. M/s. Kumaragiri : Rs. 9,938 Electronics Ltd. ------------- Total : Rs. 4,89,788" ------------------------------------------------ 3. It was contended before the revenue authorities that ....
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....r opportunity of being heard, the assessee could have placed evidence before the CIT(A) was really of no consequence. The matter was restored to the file of Assessing Officer for fresh adjudication. 7. It was further submitted by the learned counsel for the assessee that the assessee is expected to maintain books for 6 years and not beyond that, as such Judicial Member was not correct in restoring the matter to the file of Assessing Officer for fresh adjudication. 8. The ld. D.R. relied on the decision of the ld. Judicial Member. It was submitted that the assessee failed to adduce evidence before the revenue authorities in regard to its claim. As it was not clear that whether advance was made out of the borrowed funds or out of own funds, the ld. Judicial Member rightly restored the matter to the file of the Assessing Officer for fresh adjudication. 9. Having heard rival submissions and after perusing the details available on record, I find that the ld. Judicial Member restored the matter to the file of the Assessing Officer as because in his opinion assessee failed to discharge the burden as to the fact that no borrowed funds were diverted to the sister concerns free of interes....