TaxTMI 
TaxTMI 
2026 (5) TMI 1855
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....s Pranava Electronics (P) Ltd. Vs DCIT, Circle 12(2), Bengaluru [2021] 124 taxman.com 242(Karnataka) and the Hon'ble Supreme court Judgment in the case of M/s TRF Ltd. Vs CIT in [2010] 90 taxman 391/323 ITR 397, whereas the case of the assessee is distinguishable on facts and law? 2. Whether the Ld. CIT erred in appreciating the provisions of Memorandum of Association (MoA) of the assessee company, whereas as per the MoA of the assessee company, advancing loans or making investments is not mentioned as the business activity of the assessee company? 3. Whether the Ld. CIT erred in allowing the benefit of section 36(1) (vii), whereas as per the MoA of the assessee company, advancing loans or making investments is not mentioned as the business activity of the assessee company. 3. Briefly stated the facts show that the assessee is a company which is stated to be engaged in investment, finance and trading in shares, filed its return of income on 29.10.2018 at a total loss of Rs.3,03,82,056. Search u/s. 132 of the Act was conducted on 6.11.2019 in the case of Skanray Technologies Pvt. Ltd. and the premises owned by the assessee were also covered u/s. 133A of the ....
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....2008-09 was also shown that assessee is engaged in the business of investment, finance & trading of shares. Therefore, the claim of the assessee is that the losses were advances in the ordinary course of business. It was further stated that the auditor has also stated that the assessee is required to be registered as Non-Banking Finance Company. The assessee has also shown the object clause of the Memorandum wherein it was found that the object of the assessee was also to lend money. The assessee supported the claim by relying on the decision of Hon'ble Supreme Court in the case of PCIT v. Shapoorji Pallonji & Co. Ltd., 165 taxmann.com 708. 6. The ld. CIT(A) after perusing the above reasons held that the Hon'ble Karnataka High Court in the case of Pranava Electronics Pvt. Ltd. v. DCIT, 124 taxmann.com 242 and further relying on the decision of the Hon'ble Supreme Court in the case of TRF Ltd. v. CIT, 323 ITR 397 held that assessee has met the requirements of section 36(1)(vii) of the Act and deleted the disallowance. 7. The ld. AO is aggrieved. The ld. JCIT, Shri N. Balusamy, Sr. DR, vehemently supported the order of the ld. AO and Shri Padam Chand Khincha, CA, the ld. AR rel....
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....trovert the findings of the ld. CIT(A). Accordingly we confirm the order of the ld. CIT(A) and dismiss all the 3 grounds against which the above disallowance is raised by the ld. AO. 11. In the result, the appeal filed by the ld. AO is dismissed. Pronounced in the open court on this 26th day of May, 2026. ============= Document 1 Al No: CITIA), Bengaluru-11/11098/2015-16, CITIAI, Bengaluru-11/10813/2016-17. CITTAL. Bragaluru-11/10752/2017-18, Bengaluru-11/11004/2019-20 A.Y. 2016-17, 2017-18, 2018-19 & 2020-21 ience the AO is hereby directed to deleted the disallowance made u/s 14A. Accordingly, the grounds of appeal no.2 & 3 are hereby allowed 18.0 Grounds of appeal no.4 & 5, the appellant argues that the AO has erred in livellowine the iduennes written off amounting to Rs.2,25,00,000/ -. The AO should section 37. owable expenditure under " est. . It is seen that assessee has claimed Advance written of amounting of Rs. 2.25,00,000/ -. A show cause notice med along with Ledger and Supporting The details of these expenses claimed The assessee has submitted his reply on 23.03.2022 but has only submitted the marsale at expenditure claimed and has not submit....
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....fact, you will appreciate that said companies were incurring losses. Considering uu uu in Profit & Loss Accourt, 5,2 Assessee is in business of financing and investments out of borrowed funds as welt as from out of its own capital. Assessee is camrytig t pourraient duun supported The details of nature of business is duly experten tehumus 102 to 109, by Memorandum of Association furnished herewith on Page Nos. tu explained above and also from the Audited Balance Sheet this facts clearly reveals the recovered have in various parties in ordinary assessee has advanced loans to tale, this form battery course of business and it is the Assessment Order . Further , we also draw your attention to point no. (xvi) in Annexure A to the Independent Auditor's Report of Financial Year 2017-18. The "fxvt) In our opinion and according to the information and explanation given to uts, the company to a Bank of India, 1934. Section 45-IA of the Reserved assessore has failed to establish the advances 5.3. With regard to obserwa order to satisfy the nature of business carried out as Branding by assessee in ordinary course of the facts and most of business is Financing wave of financing acti....
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..... Kannan Ramanujan by assessee pursuant to the objects in the MOA of the respective companies. Lending and advancing money form part of the wis as explained about relevant portion of the MOA is above .6 Further assessee is offering income from be-press or profession in Computation of The face not disputed by AO, Chepte & ITR filed and said facts is tom hed by assessee that it is carrying business of af it is established 479 Certified True Copy Appeal No: CITA). Bengaluru-11/11098/2015-16. CIT(A). Bengaluru-11/11504/2019.20 201004/2019-20 A.Y. 2016-17, 2017-18, 2018-19 & 2020-21 assessee submi 5.17 Further, that the observation of the AO that assessee has borrowed and submitted that assessee has advanced the town out of own capital as per the financial statement you will appreciate that assessee has its own capaldi warumnegen but notestes : Rs. 18.82 Cr. (aggregating to Rs. 224.18 Cr.) and loans adnances given by assessee i if assessee has sufficient interest free funds and out of the same advances given the it as helt by Principal. Commissioner of Income tax . Shapoori Palloni and Co. Ltd under: . "Section 36(1)(iii) of the Income-tax Act, 1961 -....