2013 (2) TMI 759

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....strial control equipments and fuel dispensing units, filed return declaring total income of ₹ 5,03,99,856/- which was processed u/s 143(1) of the Income Tax Act, 1961 (the Act). Thereafter, the case was selected for scrutiny and accordingly the A.O. issued statutory notices u/s 143(2) and 142(1) of the Act. During the course of assessment it was, inter alia, observed by the A.O. that the assessee had made an advance to it's subsidiary company viz. Intel Instruments and Systems Ltd. amounting to ₹ 21,58,000/-. Similarly from the details submitted by the assessee the A.O. further observed that the assessee company had made an advance to a related concern viz. Aplabs Seba Electronics Ltd., amounting to ₹ 23,13,002/-. It was f....

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....esumably support assessee's contention that no disallowance can be made under this head. However, the A.O. after considering the provisions of section 36(1)(iii) of the Act, the decision of the Hon'ble Supreme Court in S.A. Builders Ltd. v. CIT (2007) 288 ITR 1 (SC) and the balance sheet of the assessee made a disallowance u/s 36(1)(iii) ₹ 22,50,264/- being 10% of ₹ 2,25,02,637/- (investment made in subsidiary companies ₹ 1,80,00,000/- (+) advances made to related concerns ₹ 45,02,637-) and accordingly completed the assessment at an income of ₹ 5,26,50,120/- vide assessment order dtd. 2- 12-2009 passed u/s 143(3) of the Act. On appeal, the ld. CIT(A) while agreeing with the views of the A.O. upheld the disallow....

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....sideration made by the A.O. and sustained by the ld. CIT(A) be deleted. He also placed on record the copy of the said order of the Tribunal 9. On the other hand, the ld. D.R. supports the order of the A.O. and the ld. CIT(A). 10. We have carefully considered the submissions of the rival parties and perused the material available on record. We find that the facts are not in dispute inasmuch as it is also not in dispute that as on 31-3-2007 the shareholders funds are ₹ 29,25,76,000/- (share capital ₹ 5,00,00,000/- (+) reserves and surplus ₹ 24,25,76,000/-) as against the investment in subsidiary company and advances made by the assessee ₹ 2,25,02,637/- (supra). We further find that the Tribunal in assessee's own case....