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Interest free fund can be used to give interest free advances
Case Law Details
- Case Name
- Metro Institute of Medical Sciences P.Ltd. Vs ACIT (ITAT Delhi)
- 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 Delhi
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Even otherwise the interest free funds available with the assessee are Rs.44.28 crores. The assessee has earned profit of Rs.5.93 crores during the Assessment Year 2007-08. If depreciation of Rs.2.88 crores is added, the cash accruals during the year would be Rs.8.81 crores. The interest free advances are to the tune of Rs.14.89 crores. The Hon’ble Bombay High Court in the case of CIT vs. Reliance Utility and Power Ltd. 178 Taxman 135 Bombay held that in such situations the presumption would be that interest free funds were used for the purpose of giving interest free advances. The A.O. has ...
Good verdict.
CA. Subhash Chandra Podder ,FCA
kolkata
17/09/2012