S.57: Income from other sources-Deductions – Interest-Director - Order of Tribunalisset aside and matter was
to be remanded back for disposal afresh.
Assessee was a director in various companies belonging to 'S' groupIn course of assessment proceedings, Assessing
Officer noticed that assessee had declared certain loss under head 'income from other source'. He further noted that loss represented amount of interest on loans borrowed from one company belonging to 'S' group for purchase of shares in several other companies belonging to same Group. According to Assessing Officer, method adopted by assesse amounted to a colourable device for transferring funds of some concerns of 'S' Group to other concerns of same Group, himself acting as a conduit. He thus disallowed assessee's claim for deduction of interest on borrowed funds. Tribunal, however, allowed assessee's claim. The Court held that on facts, it was worth examining why companies belonging to same group could not have helped each other directly and why assessee was introduced as a conduit. therefore, impugned order of Tribunal was to be set aside and, matter was to be remanded back for disposal afresh. Matter remanded. (A.Y.1994-95)
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