TaxTMI 
TaxTMI 
2012 (7) TMI 627
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.... amounting to Rs.34,34,050/- on different footing which was not taken up by the Assessing Officer. 2. The learned CIT(Appeals) has erred in law and on facts in allowing interest expenses considering that the distributing business activity directly by the assessee or indirectly on commission basis form part of the same business which was however not the basis of disallowance by the A. O. 3. The learned CIT(Appeals) has erred in law and on facts in not considering the fact that the Assessing Officer has disallowed the interest expenses on establishing the nexus between interest bearing funds pertaining to directors and their relatives and interest free advances lying with the firms owned by the directors and their relatives. 4. The learned....
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.... 15% to 18%. As per the provisions of Income Tax Laws in the case of partnership firm the rate of interest is allowed @12% and the learned AO found the interest paid to be excessive. The learned AO had given reasonable opportunity of being heard on this issue. The assessee also responded vide its reply dated 24-11-2010 and the assessee claimed that Rs.2.24 Crores was debtors as on 31-03- 2008 and there was no loan and advances. The amount of outstanding commission was receivable from two parties. These are Unjha Pharma and Unjha Pharmaceuticals. Previously, it was supplying goods to these two parties. Since last three years business was closed down and only commission was received from these two parties which were credited in its account. ....
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.... in case of firm to the partners? The learned CIT(A) has considered the following decisions of the Hon'ble Supreme Court: 1. CIT Vs. Prithvi Insurance Co. Ltd. [1967] 63 ITR 632 (SC) 2. Produce Exchange Corpn. Ltd. Vs CIT [1970] 77 ITR 739 (SC) and 3. Standard Refinery & Distillery Ltd. Vs. CIT[1971] 79 ITR 589 (SC) The learned CIT(A) found that similar interest claim was allowed by the AO in scrutiny assessment for AY 2007-08 where the issue is subjective and involved formation of opinion, it cannot be revisited in the subsequent assessment years. Following the decision of the Hon'ble Karnataka High Court in the case of CIT Vs Sridev Enterprises, 192 ITR 165, the learned CIT(A) has allowed the appeal on interest d....
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....he learned AO had allowed the interest in scrutiny assessment on same rate, therefore, consistency is required to be maintained as held in the case of CIT Vs Sridev Enterprises, 192 ITR 165 (Kar.). On consistency and definiteness of approach by the revenue is necessary in the matter of recognizing the account maintained by the assessee as held in the case of Veecumsees Vs CIT, 220 ITR 185 (SC) that interest on borrowed capital deductible for the period after cinema business discontinued on the ground the loan was taken for the purpose of business, this position does not alter in case of closure of business, as the business was composite one. Therefore, he prayed to allow the claim of interest expenses. 6 We have heard both the sides and go....