TaxTMI 
TaxTMI 
2013 (3) TMI 169
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.... that unrecognised gratuity fund is allowable u/s. 37(1), when the case is hit by the provisions of section 40A(9) and especially when the assessee failed to comply with the provisions of section 36(1)(v)." 4. This ground is covered in favour of the assessee in I.T.A. No. 198/Hyd/2011 in assessee's own case and the Tribunal vide order in dated 16th December, 2011 held as follows: "3. After hearing both the parties, we are of the opinion that similar issue came up for consideration in assessee's own case for assessment year 2002-03 in I.T.A. No. 349/Hyd/2006. The Tribunal decided the issue in favour of the assessee vide its order dated 15.2.2008 by holding as follows: "4. We have considered rival submissions on either side and also ....
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....lls Ltd. (supra) and the judgement of the jurisdictional High Court in the case of Warner Hindustan Ltd. (supra), it has to be allowed. 5. We have carefully gone through the judgement of the jurisdictional High Court in the case of Warner Hindustan Ltd. (supra). In the case before the jurisdictional High Court, the Provident Fund was not approved by the CIT. The Andhra Pradesh High Court after referring to the judgement of the Bombay High Court in Tata Iron & Steel Co. Ltd. v. D.V. Bapat, ITO (1975) 101 ITR 292, and the judgement of the Supreme Court in Metal Box Company of India Ltd. vs. The Workmen (1969) 73 ITR 53, held that the amount paid towards an unapproved gratuity fund can be deducted under sec. 37 of the I.T. Act, though not u....
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....est to be disallowed. In other words, if the assessee used the sister concern as a conduit to divert interest bearing funds to the personal advantage any director or relative of directors of the assessee company, then this interest to be disallowed. The burden is on the assessee to prove that the payment of interest is genuine. Further, once it is borne out of the record that the assessee had borrowed certain funds on which liability to pay interest is being incurred and on the other hand, certain amounts had been advanced to sister concerns or others without carrying any interest or less interest without any business purpose, the interest to that extent advance had been made without carrying any interest is to be disallowed u/s 36(1)(iii) ....
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....e and accordingly, such interest payment cannot be allowed as a deduction. However, in the present case, as seen from financial statement of assessee's, there is availability of own fund and reserve and surplus in the impugned assessment years. These funds are more than sufficient to make investment in the subsidiary company. This can be seen from the following table: (a) Financial year 2000-01 2001-02 2002-03 (b) Funds available for utilization after Considering the impugned investment (Rs. in lakhs) 151.21 135.66 29.27 (c) Loans from banks 109.58 84.96 (d) Investment made in fixed assets 236.38 179.74 18.94 (e) Investment made in M/s. Suvision 195.00 56.35 7. In our opinion, the assessee....
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.... of the assessee rather than referring the same to Special Bench. Further, we feel it appropriate to mention herein that the order of the co-ordinate Bench in the case of Micro Instruments Co. Ltd. vs. ITO (12 DTR 501) the Tribunal Bench of Chandigarh held as follows: "The assessee initially claimed deduction under s. 80IB for the impugned unit in the asst. yr. 2001-02 and the same was allowed. In this assessment year, i.e., 2003- 04 the claim of the assessee was in continuation of the claims made in the earlier assessment years for the impugned assessment year falls within the number of assessment years as specified in the section in which the claim is eligible. It is also a pertinent fact position that the claim allowed to the assessee....