March 13, 2015[2015] 55 taxmann.com 82 (Indore - Trib.)
IT : Disallowance should not be made under section 36(1)(iii), if loans had been advanced by assessee due to commercial expediency to sister concerns
IT : In view of Explanation 2(b) to section 147 Assessing Officer can take action under section 147 in a case where return has been processed under section 143(1) on basis of material which is available in return or along with return with Assessing Officer
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[2015] 55 taxmann.com 82 (Indore - Trib.)
IN THE ITAT INDORE BENCH
Agrawal Indotex Ltd.
v.
Assistant Commissioner of Income-tax, Circle 2(1), Indore*
P.K. BANSAL, ACCOUNTANT MEMBER
AND MUKUL KR. SHRAWAT, JUDICIAL MEMBER
IT APPEAL NO. 693 (IND.) OF 2013
[ASSESSMENT YEAR 2010-11]
SEPTEMBER 19, 2014
I. Section 36(1)(iii), read with section 147, of the Income-tax Act, 1961 - Interest on borrowed capital (Loans and advances to subsidiary) - Assessment year 2010-11 - Assessee had given advances to its subsidiary company out of cash credit account of assessee maintained by bank - Assessee had also given corporate guarantee to bank due to commercial expediency on behalf of subsidiary - Thereafter, said subsidiary had become sick company - Whether interest on borrowed capital was allowable - Held, yes [Para 25] [In favour of assessee]
II. Section 147, read with section 143(1), of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts (Section 143(1) v. section 147) - Assessment year 2010-11 - Whether material which is available with Assessing Officer even along with return at time of processing of return can be basis for 'reason to believe' as in view of clause (b) of explanation 2 to section 147, it can be deemed that income chargeable to tax has escaped assessment - Held, yes - Whether requirement of new material or fresh tangible material coming in possession of Assessing Officer as a prerequisite condition for reassessment is applicable only where he had made an assessment earlier - Held, yes - Whether in view of Explanation 2(b) to section 147 Assessing Officer can take action under section 147 in a case where return has been processed under section 143(1) on basis of material which is available in return or along with return with Assessing Officer - Held, yes [Paras 13, 14 and 21] [In favour of revenue]
IT : Disallowance should not be made under section 36(1)(iii), if loans had been advanced by assessee due to commercial expediency to sister concerns
IT : In view of Explanation 2(b) to section 147 Assessing Officer can take action under section 147 in a case where return has been processed under section 143(1) on basis of material which is available in return or along with return with Assessing Officer
■■■
[2015] 55 taxmann.com 82 (Indore - Trib.)
IN THE ITAT INDORE BENCH
Agrawal Indotex Ltd.
v.
Assistant Commissioner of Income-tax, Circle 2(1), Indore*
P.K. BANSAL, ACCOUNTANT MEMBER
AND MUKUL KR. SHRAWAT, JUDICIAL MEMBER
IT APPEAL NO. 693 (IND.) OF 2013
[ASSESSMENT YEAR 2010-11]
SEPTEMBER 19, 2014
I. Section 36(1)(iii), read with section 147, of the Income-tax Act, 1961 - Interest on borrowed capital (Loans and advances to subsidiary) - Assessment year 2010-11 - Assessee had given advances to its subsidiary company out of cash credit account of assessee maintained by bank - Assessee had also given corporate guarantee to bank due to commercial expediency on behalf of subsidiary - Thereafter, said subsidiary had become sick company - Whether interest on borrowed capital was allowable - Held, yes [Para 25] [In favour of assessee]
II. Section 147, read with section 143(1), of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts (Section 143(1) v. section 147) - Assessment year 2010-11 - Whether material which is available with Assessing Officer even along with return at time of processing of return can be basis for 'reason to believe' as in view of clause (b) of explanation 2 to section 147, it can be deemed that income chargeable to tax has escaped assessment - Held, yes - Whether requirement of new material or fresh tangible material coming in possession of Assessing Officer as a prerequisite condition for reassessment is applicable only where he had made an assessment earlier - Held, yes - Whether in view of Explanation 2(b) to section 147 Assessing Officer can take action under section 147 in a case where return has been processed under section 143(1) on basis of material which is available in return or along with return with Assessing Officer - Held, yes [Paras 13, 14 and 21] [In favour of revenue]
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