TaxTMI 
TaxTMI 
2022 (10) TMI 561
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....ts while sustaining the disallowance of interest expenses of Rs. 21,13,971/- u/s 57(iii) of the I.T. Act, 1961 which is requires to be deleted. 2. That the Ld. CIT(A) has without considering the facts and circumstances of the case disallowed interest expenses of Rs.21,13,971/- is against the principal of natural justice and therefore it requires to be deleted. 3. That the Ld. CIT(A) has sustain the disallowance of notional interest of Rs. 21,13,971/- on adhoc basis with certain assumptions and presumptions and also without doubting genuineness of the transactions is against the documents available on records and against the provision of law. Therefore the addition sustained of Rs. 21,13,971/- may please be deleted. 4. That the Ld. CIT....
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....21] 127 taxmann.com 72 (SC), took suo motu cognizance of the situation arising out of the challenge faced by the country on account of COVID-19 Virus and resultant difficulties that could be faced by the litigants across the country. Consequently, it was directed vide order dated 23-3-2020 that the period of limitation in filing petitions/applications/suits/appeals/all other proceedings, irrespective of the period of limitation prescribed under the general or special laws, shall stand extended with effect from 15-3-2020 till further orders. The suo motu proceedings were, disposed of issuing the directions as to in computing the period of limitation for any suit, appeal, application or proceeding, the period from 15-3-2020 till 14-3-2021 sha....
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....der Section 57(iii) are not allowable to the extent they are attributable to the lower interest charged by the assessee i.e. lesser than 12% per annum on the advanced made. Therefore, Ld. Assessing Officer added/ disallowed an amount of Rs. 77,15,185/- out of the expenses claimed by the assessee under Section 57(iii) and added the same to the income of the assessee. 5. In appeal, Ld. CIT(A) gave part relief to the assessee by holding that the AO has not given any finding that the said loans on which higher rates of interest was paid were not utilized for earning interest income. The AO only found that the rate of interest paid was comparatively higher and therefore excessive and unreasonable. Therefore, disallowance under Section 57(iii) w....
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.... to any person specified under Section 40A(2)(b) of the Act, such goods/services should be provided at market rate. Accordingly, Ld. CIT(A) held that since loans were advanced maximum @ 8.5%, therefore 3% or one fourth of such interest paid @ 12% as being excessive and unreasonable. Accordingly, 1/4th of total interest paid to such related parties of Rs.84,55,885/- i.e. Rs. 21,13,971/-was disallowed and added back to the appellant's income under Section 58(2) r.w. 40A(2) of the Act. The Ld. CIT(A) directed the Ld. Assessing Officer to allow/ delete the balance addition of Rs. 56,01,214/- (Rs. 77,15,185/- minus Rs. 21,13,971/-) Accordingly, Ld. CIT(A) partly allowed the assessee's appeal. 6. The assessee is in appeal before us against the a....
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.... 8 per cent per annum on borrowings from banks. The High Court held that difference between interest charged from its directors on aforesaid advances and interest paid by it to banks on borrowings was not an allowable deduction. In the case of CIT v. Accelerated Freeze Drying Co. Ltd. [2011] 10 taxmann.com 108 (Kerala), the assessee company was engaged in export of marine products. On verifying the accounts, the Assessing Officer found that the assessee had advanced an interest free loan to a sister concern. The Assessing Officer held that diversion of borrowed fund on which interest was paid by the assessee to the sister concern without collecting interest called for proportionate disallowance. The High Court held that unless the interest ....