Allowability of Interest when Assessee has also advanced interest free loan to sister concern

By TG Team Income Tax Judiciary June 17, 2011

TaxGuru Citation: 2011 taxguru.in 526
Case Name: ITO Vs GSB Capital Markets Ltd (ITAT Mumbai)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Related Assessment Year: 2004- 05
Courts: ITAT Mumbai

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Where the amount is given to the sister concern by the assessee interest-free out of own funds and for business purposes, no dis allowance can be made for interest expenses u/s 40A(2)(a)

ITO, Mumbai Vs GSB Capital Markets Ltd (ITAT Mumbai)– Whether where the assessee has considered the amount receivable from debtor as bad debts in the books of account, no dis allowance can be made for want of fulfillment of conditions of section 36(2) – Whether where the amount is given to the sister concern by the assessee interest-free out of own funds and for business purposes, no dis allowance can be made for interest expenses u/s 40A(2)(a) – Whether the losses of mutual funds are rightly adjusted against the speculation profit on shares in view of explanation to section 73 – Whether where the amount is taken by the assessee under a business transaction, no addition can be made u/s 2(22)(e) for deemed dividend. – Assessee’s appeal partly allowed.

IN THE INCOME TAX APPELLATE TRIBUNAL

MUMBAI G BENCH, MUMBAI

Before Shri D.K. Agarwal and Shri Pramod Kumar

ITA No. 4090/Mum/08Assessment year : 2004- 05

Income Tax Officer Wd.4(1)(2) Vs. GSB Capital Markets Ltd.

ITA No. 3483/Mum/08Assessment year : 2004-05