Case Law Details
Progressive Poultry Farm Vs ITO (ITAT Visakhapatnam)
As per provision of 36(1)(iii) of the Income Tax Act, 1961, if any amounts are used for non-business purposes by the assessee, the same are to be disallowed. Since in this case, the partners have made drawings from the assessee firm and used for non business purposes, the provisions of section 36(1)(iii) are squarely applicable.
It is an undisputed fact that the assessee firm borrowed some interest bearing funds in the form of capital from the partners and in the form of secured loans. It is also an undisputed fact that some of the partners have borrowed some interest free loans from the firm for non business purposes. Therefore, the AO rightly disallowed by applying the provisions of 36(1)(iii) of the Act.
FULL TEXT OF THE ORDER OF ITAT VISAKHAPATNAM
Appeals in I.T.A.No.160/Viz/2020 and 157/Viz/2020 are filed with the delay of 121 days and 124 days respectively. The assessee filed petition for condonation of delay and submitted that the appeals could not be filed in time due to his ill health during Covid pandemic which is beyond his control. The assessee pleaded for condonation the delay and for admitting the appeals, for which the Ld.DR has raised no objection.
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