TaxTMI 
TaxTMI 
2015 (8) TMI 1146
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....ding the erroneous order passed by the Assessing Officer making disallowance of Rs. 2,97,82,854 under section 36(1)(iii) of the Income-tax Act, 1961. (b) That in upholding the disallowance of Rs. 2,97,82,854, the learned Commissioner of Income-tax (Appeals) has been guided by irrelevant and erroneous considerations. The judgments relied upon both by the Assessing Officer and the learned Commissioner of Income-tax (Appeals) have no application to the facts and circumstances of the case. The judgments relied upon in support of the assessee's case were relevant to decide the controversy in issue. Both authorities have looked at the case from wrong angle thereby coming to an erroneous conclusion. (c) That the authorities below have fail....
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....ccount that against the income earned under the heads, house property, interest income and income on account of transfer of land rights, the assessee had claimed financial charges of Rs. 17,46,69,166. 2.2. The assessee in its reply pointed out that the assessee itself added back interest of Rs. 9,84,31,463 while filing its revised return and accordingly loss was reduced as against the originally returned. As regards the balance interest, the assessee pointed out that the same was attributable to the business of the assessee for which it had given advance to buy land rights on which it had shown income of Rs. 5 crores. 2.3. The assessee also pointed out that it had shown interest income of Rs. 20,85,562 on account of various loans and adva....
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....disallowance at Rs. 2,97,82,854 as under : 17,44,12,088 x 86,32,75,829 = 12,82,14,017 1,17,43,31,352 Interest needs to be disallowed 12,82,14,017 Less : interest already added back 9,84,31,463 Balance interest 2,97,82,854 2.5. In appeal, the learned Commissioner of Income-tax (Appeals) confirmed the Assessing Officer's action, inter alia, observing that the assessee-company had made investment in group companies of Rs. 20,05,64,120 to have a controlling stake on such companies. Besides, the assessee had given interest-free advance to the group companies of Rs. 1,68,43,58,566. He further pointed out that no benefit was shown to have been derived by the assessee ....
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....with DD infrastructure and other companies of the group for developing real estate project at Faridabad. He further submitted that under the Land Acquisition Act, single entity is restricted to purchase over certain restricted limit of land. In view of this restriction, the assessee advanced/borrowed money for business purposes to its group concerns for purchasing the plot of land and thus the amount was advanced to group concerns not for controlling interest in the company but for commercial expediency. He submitted that the findings of the learned Commissioner of Income-tax (Appeals) that the amount was advanced for acquiring controlling interest, is not correct. Learned counsel further referred to page 16 of the paper book wherein the ba....
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....remise that investments in group companies were made to have controlling interest in such companies and interest-free advances were given to group companies which were not for business purpose. We find that the entire thrust of the assessee's submissions from the very beginning was that the amounts were advanced to group concerns, keeping in view the restrictions imposed by the Land Acquisition Act and this aspect we find has not at all been addressed by the lower Revenue authorities. If the advances were given out of commercial expediency then it is settled law that no disallowance is called for. 5.1. From the details reproduced from balance-sheet as above it appears that the amounts were advanced for various purchases and, therefore,....