Case Law Details
In case of CIT vs. M/s Kudu Industries, P&H High Court held that In the absence of anything to indicate that the interest free advance was made only from a particular corresponding advance received by the assessee, the advance made by the assessee would obviously be from the common pool of money. Money lying in a common pool has no identity. The various amounts advanced to the assessee get merged into a common pool. There is no justification then either for the assessee or for the department to take into consideration the rate of interest in respect of a particular advance or advances to the assessee. The only logical approach is to take into consideration the average interest rate at which the assessee has availed of the advances.
FULL TEXT OF THE JUDGMENT IS AS FOLLOWS :-
HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
ITA No.388 of 2014 (O&M)
RESERVED on:08.07.2015- DATE OF DECISION: 31.07.2015
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