TaxTMI 
TaxTMI 
2026 (7) TMI 1884
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....e-8(2), Mumbai, u/s. 143(3) read with section 147 of the Income-tax Act (hereinafter referred to as the "Act"), dated 27.08.2019, for Assessment Year 2012-13. 2. Grounds taken by the assessee are reproduced as under: 1. On given facts, circumstances and provisions of the law, the Ld. CIT(A) erred in concluding that the tangible material evidence was available which warranted the re-opening of the case of the assessee. Such reassessment proceedings without any tangible material evidence is bad in law and liable to be quashed. 2. On given facts, circumstances and provisions of the law, the Ld. CIT(A) erred in concluding that the advance given by the assessee to its subsidiary company was not on account of commercial exped....
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.... funds of Rs. 3,37,74,000/-, assessee had given an interest-free advance of Rs. 3,16,70,295/- to its subsidiary company, Turakhia Engineering Company (Patalganga) Pvt. Ltd. He noted that the funds were immediately diverted upon receipt. For instance, on 16.08.2011, a loan of Rs. 1,50,00,000/- was received, and on the same day Rs. 1,50,11,545/- was advanced. Similarly, on 21.10.2011 Rs. 1,50,25,000/- was received and Rs. 1,50,10,000/- was advanced. 3.2. Assessee explained that the advance was given to its subsidiary for the purchase of industrial land at MIDC and claimed 'commercial expediency' by stating that since it was the first year of the subsidiary's incorporation and there was no income, no interest was charged. Ld. Assessing ....
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....ss purposes. 4.1. While dealing on the merits of the case, ld. CIT(A) makes an observation on page-9 of its impugned order that "the advance was made voluntarily for the purchase of capital asset (land) by the subsidiary which does not carry the same weight of commercial expediency as protecting a subsidiary's working capital arrangement to satisfy lenders." This observation of ld. CIT(A) establishes that facts of the present case are undisputed as to advancement of loan by the assessee for the purchase of land by its wholly own subsidiary. He subsequently dismissed the appeal by holding that the transaction lacks the characteristic of a prudent commercial decision. 5. In the appeal before us, ld. Counsel for the assessee reiterated t....
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....rest of Rs. 9,78,652/- on the inter-corporate deposit taken by it from its another group company named Turakhia Ferromet Pvt. Ltd., amounting to Rs. 3,37,74,000/-. Subsequently, it gave advance to its another group company named as Turakhia Engineering Company (Patalganga) Pvt. Ltd. of Rs. 3,15,70,305/-. This was given for purchase of land as it was time consuming process of incorporating a new company and having its name approved as a special purpose vehicle. Since the group management did not want to miss the opportunity for purchase of land for its business through the SPV, i.e., Turakhia Engineering Company (Patalganga) Pvt. Ltd., it took the business decision of advancing loan to Turakhia Engineering Company (Patalganga) Pvt. Ltd. enti....
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....ocuments in respect of the land obtained by Turakhia Engineering Company (Patalganga) Pvt. Ltd. entity which is dated 29.06.2015. It was thus, asserted that there is no colourable device as alleged by the ld. CIT(A) but an actual transaction undertaken by the wholly owned subsidiary of the assessee for obtaining the plot of land from MIDC under the lease arrangement for which assessee had given a loan to it. The objective of obtaining the lease was to start a business centre. The only lapse which occurred is the delay in complying with the MIDC formalities and incorporation of the special purpose vehicle as Turakhia Engineering Company (Patalganga) Pvt. Ltd. entity which did not take place in the year under consideration but eventually got ....