2014 (1) TMI 1490

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....ally correct in deleting the addition made by the AO under section 36(1)(iii) of the I.T. Act, 1961 without appreciating the facts of the case that the assessee diverted its borrowings to its sister concerns, not for business purposes. 2. Whether the Hon'ble ITAT was legally correct in deleting the addition of Rs.2,40,838/- sustained by the CIT(A) under section 36(1)(iii) of the I.T. Act. 3. Whether Hon'ble ITAT, Agra's order is not perverse wherein it has failed to consider all the facts of the case and express provisions of law." 3. The Assessing Officer completed the assessment of the assessee under Section 143(3) on 29 December 2011 and determined the total income of Rs.70.76 lacs against the returned income of Rs.29.23 lacs an....

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....paid to the Bank was between 15% to 18% while interest on the loans which were advanced out of borrowed funds was charged at the rate of 18%. The CIT (A) held that the business expediency for furnishing the loan was duly established with reference to Shree Krishna Ship Breaking Industries and hence no disallowance was required to be made. However, in regard to M/s Neuromed Imaging Centre (P) Ltd., it was found that an amount of Rs.1 crore was paid by way of loan on 4 July 2008 at a rate of 12% immediately after a loan of Rs.77.50 lacs was taken at a much higher rate. Hence, it was found that there was no business expediency and the amount which was obtained at a higher rate of interest was passed on to the sister concern at a lower rate of ....