TaxTMI 
TaxTMI 
2020 (2) TMI 1099
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....he Tribunal by the impugned order has allowed the said appeal preferred by the Respondent- assessee and deleted the disallowance of interest made by the Assessing Officer of the amount of Rs. 5.68 crores. The disallowance was made by the Assessing Officer by holding that the assessee had obtained interest bearing loans which had in turn been advanced to sister concerns and other associates without charging interest and that such interestfree advances were not made for business purposes. Consequently, the Assessing Officer has held that the assessee did not satisfy the condition laid down in Section 36 (1) (iii) of the Income Tax Act. 2. Briefly stated, the facts of the case are that the assessee is engaged in the business of real estate ....
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.... towards share application money and had also advanced a loan of Rs. 79.65 crores in Gaursons Realtech Pvt. Ltd. The submission of learned counsel for the Appellant is that the Assessing Officer had undertaken a forensic examination of the money trail and found that the loans received from the two Banks namely, Bank of Baroda and Andhra Bank aggregating to Rs. 158.50 crores, had been channeled by the assessee inter alia to Gaursons Realtech Pvt. Ltd. The Tribunal has found that, as a matter of fact, the assessee had paid the amount of Rs. 79.85 crores on behalf of Gaursons Realtech Pvt. Ltd. to JP Infrastructure Ltd in respect of an agreement whereunder Gaursons Realtech Pvt. Ltd. had agreed to purchase land ad measuring 300 acres from JP I....
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....hile interpreting Section 37, "for the purpose of business" includes expenditure voluntarily incurred for commercial expediency, and it is immaterial if a third party also benefits thereby. In our view the Tribunal rightly allowed the appeal of the assessee and restored the deduction claimed by the assessee under Section 36 (1) (iii) of the Act. 4. The other transaction that the assessee undertook was in respect of the loan of Rs. 52.36 crores advanced to M/s Gaursons India Ltd. M/s Gaursons India Ltd. is the holding company of the assessee. The submission of learned counsel for the Appellant is that since M/s Gaursons India Ltd. is neither a subsidiary, nor an associate company, the advancement of loan by the assessee to Gaursons India,....
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....the Revenue had accepted the assessee's plea in this regard and not brought the amounts to tax under Section 36 (1)(iii), the Revenue could not have taken a different view for three years in question, particularly, without any conclusion that, in fact, general reserves, surpluses and other funds were not available. Reference may also be made to the decision of this Court in Commissioner of Income Tax v Tin Box Co. (2003) 260 ITR 637, wherein it was held that the finding of the Tribunal that the Department had not been able to controvert or disprove the fact that the assessee had substantial capital and interest-free funds available with it, not only in the preceding years but also in the years under consideration, which far exceeded the int....