Case Law Details
Kamal Translifters Vs ACIT (ITAT Ahmedabad)
Though the assessee’s claim that payment made to the Director, was for business expediency, but the assessee could not prove before us the nexus between the assessee-company with its subsidiary company in the nature of trade and business. Furthermore, Shri Kamal Deshraj Dogra being director of both the companies, payments made directly to the common director of the company is not established with proper material on hand for the so called business exigency. Thus, the assessee’s arguments that there was a running account with the sister concern viz. Kamal Freight Pvt.Ltd., which was not demonstrated any business expediency between the assessee company with that of its subsidiary company.
ITAT upheld disallowance made under section 36(1)(iii) of the Act for interest expenses in respect of interest free advance to Director for non-business purpose on the ground that the assessee has failed to establish commercial expediency in doing the financial transactions.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal is filed by the assessee against order dated 22.11.2018 passed by the Commissioner of Income-tax (Appeals)-2, Ahmedabad relating to the Asst.Year 2015-16.
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