TaxTMI 
TaxTMI 
2024 (3) TMI 436
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.... two appeals filed by Revenue for Assessment years 1988-1989 and 1989- 1990. 2. Respondent/Assessee, an individual, was carrying on business as sole proprietor in the name and style of M/s B.C. Devidas. Assessee, who was a registered broker of Bombay Stock Exchange, was also engaged in trading in securities and shares. In addition to the profit, assessee also received salary and commission from CIFCO Limited and Food and Inns Limited in which he was a director. 3. Following the allegation of involvement in multicrore securities transactions scam of nineties infamously known as Harshad Mehta Scam, Assessee got labelled as notified party on 2nd July 1992 under the Special Court's (TORTS) Act, 1992. Assessee was investigated by Centr....
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....1988 and Assessment Year 1988-1989 in this Court under Section 260A of the Act have been dismissed. 5. The following three substantial questions of law have been proposed : 6.1. Whether, on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was right in deleting the addition made on account of interest expenses incurred for non-business purposes by relying on the decision of the Jurisdictional High Court in the case of Reliance Utilities & Power Ltd. (313 ITR 340) without appreciating the fact that the decision relied upon is not applicable to the facts of the Assessee's case? 6.2. Whether, on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was justified in de....
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....terest-bearing funds are mixed together, they loose their respective identity and hence, the presumption should be that assessee has used interest free funds to give interest free advances. The ITAT in the impugned order has given a table of the position of funds and has concluded that even for Assessment Year 1989-1990 interest free funds available with assessee was sufficient to take care of interest free advances made. Therefore, the ITAT is justified in coming to the conclusion that the interest expenditure claimed by assessee was allowable. It will be useful to reproduce paragraph 10 of the judgment of this Court in Commissioner of Income Tax V/s. Reliance Utilities & Power Ltd. 2009 (178) taxmann.com 135 (Bombay) which reads as und....
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....ntion before the High Court. The principle therefore would be that if there are funds available both interest free and overdraft and/or loans taken, then a presumption would arise that investments would be out of the interest free fund generated or available with the company, if the interest free funds were sufficient to meet the investments. In this case this presumption is established considering the finding of fact both by the CIT (Appeals) and ITAT. (emphasis supplied) 7. The second issue relates to the addition made under Section 68 of the Act in respect of cash credits. In the first round of proceedings, the Assessing Officer has added a sum of Rs. 33,26,921/- under Section 68 of the Act and in the set aside proceedings, r....
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....ve been regularly paid and this creditor is continuing from the earlier years. Similarly with regard to cash credit of Rs. 1,22,555/- from one Sudha Patel, Rs. 3,94,415/- from one V.C. Patel and Rs. 30,400/- from one Vithalbhai Patel, the ITAT has come to a factual finding that the Assessing Officer has not properly examined the ledger account of assessee because these parties also had share trading transactions and major portion of the credit has been repaid during the year and the Assessing Officer has accepted the debit entries of the trading transactions as genuine. Therefore, no case is made out for interference. 8. The third and final issue is in the appeal filed by the Revenue before the ITAT that relates to deletion of various....