Brief of the case:
Delhi High Court held in CIT Vs DLF Universal Ltd held as follows :-
1. If assessee got hundi from its suppliers and get it discounted from the bank ,then the discounting charges paid by the assessee would be treated as a revenue expense;
2. If the assessee had transferred its net assets at the book value then no question of gain would arise because gain only arise if the selling price is in excess of cost price;
3. If the assessee had advanced interest to its subsidiary company and did not claim interest on that then notional interest would not be added to its income provided the funds which had advanced would not be the borrowed funds.
4. Brokerage expense incurred in relation to the real estate would be claimed as an expense even though the conveyance deed had not been registered.
Facts of the case:
- Assessee used to get hundi from its contractors as a mode of payment and got discounted from its bankers and paid some of the discounting charges to its bankers which it debited in its profit & Loss A/c;
- Assessee had transferred the net assets of manufacturing unit to its subsidiary company at the book value so it did not shown any of profit/loss in its ROI on the fact that the assets had been transferred at its cost;
- Assessee had advanced funds to its subsidiary without claiming interest on the same which AO considered the notional interest and added back to its income;
- Assessee had paid brokerage to its broker without registering the conveyance deed and claimed the expense as a revenue expense.
Contention of the assessee:
