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Factoring charges cannot be termed as interest u/s 2(28A) of Income Tax Act
Case Law Details
- Case Name
- Siva Industries and Holdings Ltd. Vs DCIT (ITAT Chennai)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- : 2007-08
- Courts
- All ITAT, ITAT Chennai
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Siva Industries and Holdings Ltd. Vs DCIT (ITAT Chennai)
ITAT Chennai held that factoring charges could not be termed as Interest under section 2(28A) of Income Tax Act, 1961. Accordingly, disallowance of the same u/s 40(a)(ia) unsustainable.
Facts-
The assessee claimed factoring charges of Rs.782.68 Lacs in the Profit & Loss Account. It transpired that the assessee took unsecured loan from its holding company M/s Siva Ventures Ltd. (SVL) and advanced the same to its subsidiary company M/s Vantage Reality Pvt. Ltd. (VRPL). The assessee also obtained loan of Rs.100 Crores f...
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