TaxTMI 
TaxTMI 
TaxTMI 
2018 (9) TMI 1243
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....ence and brevity. 2. The common grievance in all these appeals relates to the deletion of disallowance of the amount paid as finance charges when the assessee has provided interest free loans to its subsidiaries. The quantum of addition may differ in the captioned assessment years. 3. We have considered the facts in ITA No. 2712/DEL/2015 for assessment year 2010-11 for the purpose of our adjudication. 4. Briefly stated, the facts of the case are that the assessee is engaged in the business of General Sales Agent for domestic and international airlines and airport handling. From the details filed by the assessee, the Assessing Officer found that the assessee has given interest free loans and advances to three subsidiary companies and to n....
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....ated any commercial expediency in extending such interest free advances to its subsidiary companies and sister concerns. In support of her contention, strong reliance was placed on the judgment of the Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Abhishek Industries Ltd. 286 ITR 1 and on the decision of the Hon'ble Supreme Court in the case of S.A. Builders Ltd in Civil Appeal No. 5811 of 2006. Reliance was also placed on the judgment of the Hon'ble Punjab & Haryana High Court in the case of M/s Punjab Stainless Steel Inds. in Tax Appeal No. 47 of 2008. The ld. DR further stated that the ld. CIT(A) has considered the year end figure without looking into commercial expediency and without looking into the cash flow st....
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.... stage. 11. It is not in dispute that the assessment for assessment year 2009-10 was framed u/s 143(3) of the Act and no such disallowance was made in that year. We find that in assessment year 2009-10 the total loans and advances to subsidiaries and sister concerns was at Rs. 44.92 crores and in assessment year 2010-11, the same stood at Rs. 60.10 crores. The finance charges paid in assessment year 2009-10 were Rs. 3.44 crores and in assessment year 2010-11, the same were at Rs. 2.96 crores. As mentioned elsewhere, no disallowance was made in assessment year 2009-10. Reliance placed by the ld. DR on the decisions of the Hon'ble Supreme Court and Hon'ble Punjab & Haryana High Court are misplaced, in as much as, in those cases, the ....
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....(Appeals) and that of the Income-tax Appellate Tribunal, as reproduced above, in paragraphs 3 and 6, we note that the assessee was maintaining a bank account with mixed common funds in which all the deposits and withdrawals were made. There was no specific instance noted by the Assessing Officer in respect of any direct nexus between the borrowed fund and the said advances made to the subsidiaries. The Assessing Officer had made general observations without going into the depth of the matter and without pointing out any specific instance where an interest bearing borrowing was advanced to the subsidiaries or establishing that the borrowings made by the appellant were not for business purposes. Both appellate authorities below were of the vi....
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....T] 01 and Cheminvest Ltd 317 ITR [AT] 86, the Assessing Officer computed the disallowance u/s 14A r.w.r 8D at Rs. 4,82,945/-. 19. The assessee strongly agitated the matter before the ld. CIT(A) and pointed out that there was no exempt income earned during the year under consideration, therefore, there is no question of any disallowance u/s 14A of the Act. 20. The ld. CIT(A) found that there is no exempt income earned by the assessee, disallowance u/s 14A is unwarranted and deleted the addition. 21. Before us, the ld. DR strongly supported the findings of the Assessing Officer. It is the say of the ld. DR that the provisions of section 14A are very clear on this aspect and when read with CBDT Circular the disallowance so made by the Asses....