DCIT Vs Firstsource Solutions Ltd. (ITAT Mumbai)
Assessee held own funds of Rs. 23,580 lakhs, whereas investment in subsidiaries stood at Rs. 1,576 lakhs. Presumption in such case would be that assessee had used only its own funds for making investments. Further, there was commercial expediency in making said investments, hence no disallowance was called for.
FULL TEXT OF THE ITAT JUDGMENT
These cross appeals are directed against the orders passed by Ld CIT(A)-5, Mumbai and they relate to the assessment years 2004-05 and 2005-06. All these appeals were heard together and hence, they are being disposed of by this common order, for the sake of convenience.
2. The assessee company is engaged in the business of IT enabled transaction processing services.
3. We shall first take up the appeal filed by the revenue for assessment year 2004-05 in ITA No.3707/Mum/08, wherein the revenue is challenging the relief of Rs.61.71 lakhs granted by Ld CIT(A) in respect of interest disallowance.
4. We heard the parties on this issue and perused the record. The facts relating to the issue are discussed in brief. The assessee claimed interest expenditure of Rs.100.10 lakhs. The AO noticed that the assessee has made following fresh investments:-
