TaxTMI 
TaxTMI 
2016 (11) TMI 1123
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....s) - LTU, Mumbai erred in disallowing Rs. 25,94,034/- being unadjusted balances in employees account written off during the year under prior period expenditure." 3. The brief facts of the case are that the assessee has filed the return of income declaring total income to the tune of Rs. 2,27,72,31,850/- on 28.11.2003. The case was processed u/s.143(1) of the Income Tax Act, 1961 ( in short "the Act"). The refund was due and allowed to the assessee, thereafter the notices u/s. 143(2) of the Act were issued on 13.04.2004 and 07.12.2005. Subsequently, notice u/s.142(1) of the Act dated 12.12.2005 was issued and served upon the assessee. The assessee was in the business of manufacturing and trading in paints etc. Thereafter, the assessment was completed by assessing the total income to the tune of Rs. 242,04,36,965/-. Being not satisfied, the assessee filed an appeal before the CIT(A) who confirmed the said order. Subsequently the assessee as well as revenue were in the appeal in ITA No.5092/M/2007 and ITA No.5164/M/2007 wherein the case was remitted to the CIT(A) to decide the issue in view of the law settled in Supreme Court of India in the case of Goetze (India) Ltd., 284 ITR 323.....
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....paragraphs. 3.2.2 Assessee had given loan of Rs. 5,80,30,000/- to its subsidiary Pentasia Investments Ltd. for investing in Pentasia Chemicals Ltd. to avoid company law restrictions and Pentasia Chemicals Ltd. was engaged in the business of manufacture and supply of Pentaerithritol an important raw material in manufacture of paints. Subsequently, Pentasia Chemicals Ltd. became a sick company and was referred to BIFR and it was merged with assessee and of Pentasia Investments Ltd. received shares of assessee company. Subsequently, Pentasia Investments Ltd. was merged with the assessee company vide Mumbai High Court order dated 27.10.2003. Thus, primary purpose for advancing an interest free loan to Pentasia Investmnets LTd. was for investing in a company manufacturing an important and vital ingredient / chemical used in the manufacture of paints which is the main business of the assessee, and but for the company law requirements assessee would have directly invested in the company. Moreover, if the assessee had not received supply of this vital chemical from Pentasia Chemicals, it would not have been able to manufacture paints and this would have affected its business of manufactur....
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....est free loans were given by the assessee to its subsidiaries for business purpose since it had substantial interest in these companies. Therefore, I am of the opinion that disallowance of interest of Rs. 2,62,74,000/- in respect of three interest free loans is not justified and deleted. In this connection, reliance is also placed on the decisions cited by the assessee in its letter dated 07.11.2012. 1) CIT Vs. Radico Khaitan Ltd. (2004) 274 ITR 354 (Allahabad High Court) 2) ORG Informatics Ltd. Vs. Asstt. CIT (2011- TIOL-537-ITAT-AHM) 3) CIT Vs. South India Corporation (Agencies) Ltd. (2007-TIOL-138-HC-MAD) 4) CIT Vs. Sugar Mills Co. Ltd. (2010-TIO:- 697-HC-DEL-IT) 5) J.K.Industires Ltd. Vs. CIT (Central) - I, Mumbai (2011-TIOL-448-HC-Kol-IT) 3.2.5 Thus, assessee's appeal on this ground is allowed. 9. On appraisal of the above mentioned order, it is not in dispute that the company Pentasia Investment Ltd. technically engaged in business of manufacturing and supply of Pentaerithritol an important raw material in manufacture of paints. The Pentasia Investments Ltd. and Technical Instruments Mfg. Co. Ltd. and Asian Paints Industrial Coatings Ltd. subsidiary company and as....
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....re, the CIT(A) has passed the order judiciously and correctly which does not require to be interest with at this appellate stage. ITA NO.2264/M/2013 (A.Y.2004-05):- 10. The revenue has raised the following grounds:- "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of notional interest of Rs. 1,02,83,000/- on interest free loan given to wholly owned subsidiaries. The CIT(A) failed to appreciate that the Hon'ble Supreme Court in Addl. CIT Vs. Tulip Star Hotels Ltd. [CC 7138-7140/2012] dated 30.04.2012 has granted special leave to Appeal stating that the decision in S.A.Builders Ltd. Vs. CIT reported in [288 ITR 1] needs reconsideration. 2. The appellant prays that the order of the ld. CIT(A) on the above ground be set aside and that of the Assessing Officer restored." The facts of the case are the same as mentioned above while deciding the appeal relating to the A.Y.2003-04 filed by the parties. However the figures are the different. ISSUE NO.1:- 11. This matter of controversy has already been adjudicated while deciding the appeal of the revenue for the A.Y.2003-04. The issue is the same which is in connect....
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.... said rights were assigned to Asian Paints Ltd. in A.Y.2009-10. It is argued that the permission letter from MIDC requiring Asian Paints Ltd. to established R & D Centre. No doubt in the relevant assessment year no construction of any kind was shown but the property tax was paid in the relevant assessment year. On 24.07.2009 the assessee company amalgamated with Asian Paints Ltd, therefore in the said circumstances the said expenditure is not required to be disallowed on the ground of that the assessee had no business. In support of these contentions the learned representative of the assessee has placed reliance on the law settled in CIT Vs. Ralliwolf Ltd. (1980) 121 ITR 262 (Bom.) and Sardar Sarovar Narmada Nigam Ltd. Vs. ACIT (2012) 138 ITD 203 (Ahd.) (SB) and Western India Vegetable Products Ltd. Vs. CIT (1954) 26 ITR 151 (Bom.) and CIT Vs. Saurashtra Cement and Chemical Industries Ltd. (1973) 91 ITR 170 (Guj.) 16. On the other hand learned representative of the department has strongly relied upon the finding of the CIT(A) in question. It is not in dispute that the assessee company was incorporated on 29.12.1955 and in this regard the certification of incorporation is on record....