TaxTMI 
TaxTMI 
2013 (5) TMI 236
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.... in the circumstances of the case, the ITAT was right in law in holding that excess of 'security deposits' over refunds received by the assessee on sale of bottles is not a trading receipt? (ii) Whether on the facts and in the circumstances off the case, the ITAT was right in law in deleting the addition made on account of interest on interest free loans advanced by the assessee-company to its directors and sister concerns?" Question No.1 is the question of law in ITR No.30 of 1994 titled 'The Commissioner of Income Tax (Central), Ludhiana Vs. Munjal Gases, Hero Nagar, Ludhiana' decided on 29.04.2013. For the reasons recorded in Munjal Gases case (supra), question No.1 is answered against the Revenue and in favour of the assessee. In res....
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....ave resulted in further substantial loss to the company. Consequently, the disallowance ordered by the Assessing Officer was set aside. It is the said order, which was affirmed by the Tribunal in further appeal. Learned counsel for the Revenue relies upon a judgment of this Court in Commissioner of Income Tax Vs. Abhishek Industries Ltd. (2006) 286 ITR 1 to contend that the interest free loan advanced to the Directors or sister concerns from the borrowed funds will not entitle the assessee to claim expenses as business expenditure. Particular reference is made to the following observations: "34. .....Once it is borne out from the record that the assessee had borrowed certain funds on which liability to pay tax is being incurred and on the ....
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....inding that the Directors have given funds to the assessee, it is a case of commercial expediency in terms of ratio of the judgment in S.A.Builders Ltd. case (supra). We have heard learned counsel for the parties at length and found that there is no clear and categorical finding recorded by the Commissioner of Income Tax (Appeals) or by the Tribunal in respect of commercial expediency of the advancement of interest free loan to the sister concerns or the Directors. In M/s Varinder Agro Chemicals Ltd. case (supra), this Court has found that the assessee has taken a stand before the Assessing Officer that the advances were not made for business consideration. Therefore, the plea of commercial expediency was not available to the assessee in ....