TaxTMI 
TaxTMI 
2006 (9) TMI 147
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.... Tribunal allowed the appeal filed by the respondent. The Tribunal in this appeal basically considered as to whether the prima facie adjustments made by the appellant in its intimation were acceptable or not. The Tribunal was concerned with the merits of these adjustments made by the Department. Subsequently, the Department passed an order under section 143(3) of the Act. After hearing the assessee, additions were made in terms of an order dated March 31, 1997. An appeal was filed against the order passed under section 143(3) before the Commissioner of Income-tax (Appeals). He disposed of the appeal by allowing the appeal in part. Both the respondent and the appellant filed appeals before the Tribunal. The Tribunal allowed the appeal filed by the assessee in part and dismissed the appeal filed by the Revenue. It is in these circumstances, the Revenue is before us. 2. The following questions of law are framed by this court: "A (I) Whether the Tribunal was right in deleting the disallowance of interest on advances given by the respondent for the purported purchase of a coffee estate, without noting that such advance was not in the line of business of the respondent and ev....
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....strongly relies on various case law. On the other hand, Sri Datar, learned senior counsel would support the order by contending that the board of directors and the articles of association support the case of the assessee. It cannot be said that there is a new business as such warranting any interference in the case on hand. 5. After hearing, we have carefully perused the material on record. 6. The appellant is engaged in liquor business. An advance of Rs. 460 lakhs was made over for the purpose of acquisition of an estate. There have been recoveries from the said concern and accordingly an amount outstanding stood at Rs. 292 lakhs for the previous year relevant to the assessment year under appeal. The amount was advanced at 18 per cent. interest. The board resolution passed on December 22, 1989, authorised the company to invest Rs. 4,79,00,000 excluding stamp duty and registration charges. An agreement was entered into in the light of the board resolution. The Commissioner after noticing the resolution and after noticing the articles of association was of the view that the assessee cannot be said to have acquired a new business and hence he upheld the claim of the assessee. T....
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....sion for the services rendered in the matter of sale of liquor to the Canteen Stores Department of the Indian military. At this stage, as rightly argued by Dr. Krishna, this issue had to be answered against the assessee in the given circumstances in the light of a judgment of the Kerala High Court in (CIT v. Premier Breweries Ltd. [2005] 279 ITR 51 (Ker); ITRC No. 58 of 1997), in similar circumstances. The Division Bench after noticing the relevant facts has chosen to hold in paragraph 7 reading as under: "We are of the view, mere existence of an agreement does not give rise to claim for payment of commission and the income-tax authorities can go into the question whether the commission paid is properly deductible under section 37 of the Income-tax Act, 1961." 8. It was further ruled in paragraph 8 reading as under: "8. We are in full agreement with the reasoning of the assessing authority. We have already indicated that the burden is entirely on the assessee to prove those transactions. Agreement entered into between RJ Associates and Golden Enterprises by itself would not advance the case of the assessee. In this connection we may refer to the decision of the....
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....mation at a time fixed by the managers suiting their convenience. That by itself would not alter the situation as sought to be argued by Sri Datar, learned senior counsel. On the facts and in the given circumstances of this case, we are firmly of the view that the allowance by the Tribunal in the case on hand requires our interference by way of answering the said question against the assessee and in favour of the Revenue. 11. Devolution of corporate guarantee: The Assessing Officer has chosen to reject the case of the assessee in the matter of providing relief in terms of this item. When the same was challenged before the appellate authority, the appellate authority also denied the benefit. The matter was taken to the Tribunal. The Tribunal, after noticing the facts, has chosen to accept the case as allowable expenditure. 12. The Supreme Court in CIT v. Amalgamations P. Ltd. [1997] 226 ITR 188 has chosen to consider this issue and the said judgment supports the assessee. In fact this court in the case of this very assessee has chosen to hold in favour of the assessee in ITRC No. 660 of 1998 dated June 22, 2006 (CIT v. McDowell and Co. Ltd. [2006] 286 ITR 203 (Am)) in somewhat....