TaxTMI 
TaxTMI 
2023 (8) TMI 1503
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.... prejudice to one another. 1(a) On the facts and circumstances of the case and in law, the ld. CIT (A) erred in confirming the addition of Rs. 1,58,18,053/- made by the AO to the income of the Appellant by way of disallowing interest u/s. 36(1) (iii) being difference of interest paid and received by the Appellant on trade advances received and inter-corporate deposit given to unrelated parties. (b) The ld. CIT (A) failed to appreciate that the differential rate of interest paid was due to breach of contract for non-fulfilment of commitments and the same has no relation or comparison with interest received on inter-corporate deposit. (c) In reaching to the conclusion and confirming such addition the ld. CIT (A) omi....
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....closing bal. as on 31.03.2012). Ultimately, this account was settled with a journal entry on 22.11.2017, wherein M/s. Ravindra Energy Ltd. took over this liability for the pending amount as on that day, i.e., Rs. 37 Crores. Accordingly, company credited the account of M/s. Ravindra Energy Ltd. and correspondingly debited the account of M/s. Vantmuri Trading and Investments Ltd. Here it is pertinent to mention that assessee company is a subsidiary of M/s. Ravindra Energy Ltd. and M/s. Murkumbi Investments Pvt. Ltd. (To whom assessee provided un-secured loan @ 11.50%) is a shareholder of M/s. Ravindra Energy Ltd. 4. It is also observed that money taken as advance from M/s. Vantmuri Trading and Investments Ltd. for supply of goods in period....
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.... and what type of business acumen was there at the end of assessee. 6. How to run its business is a prerogative of concerned assessee. It may have loss and profit both. But, actions of the assessee must look genuine and transparent. No doubt authorities had no jurisdiction to determine a particular rate of interest, but the transactions of the assessee must not be colourable device to fulfil other purposes other than purposes of business enterprise under consideration. Assessee is totally failed to demonstrate the genuineness of its transaction along with the condition wholly and exclusively for the purposes of the Act. 7. In this connection we may refer to section 36(1) (iii) of the Income-tax Act, 1961 (here in after referred to as ....
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....see is not able to make out a case of commercial expediency and also genuineness of the transaction entered into by the assessee. 9. In C.R. Auluck & Sons (P.) Ltd. v. CIT [2014] 360 ITR 193/227 Taxman 264 (Mag.)/49 taxmann.com 21 (Punj. & Har.) the assessee borrowed money and gave the same to sister concern which was incurring huge losses and its borrowing was declared as non-performing asset by the bank. The assessee was guarantor to the subsidiary company along with two other guarantors, being the group concerns. The interest-free loan was viewed by the Assessing Officer as a measure to reduce its income by claiming interest on borrowing @ 12% per annum and the sister concern to have the income there from. The tribunal held that there....