Utilization of loan as providing financial assistance to group companies cannot raise the question of disallowance of interest on loan

Last updated: 27 March 2012

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Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
In this case, the facts are that the original assessment in this case was completed u/s. 143(3) of the IT Act, 1961 wherein, apart from others, disallowance on account of payment of interest of Rs. 10832532/- was made. Being aggrieved by the order of the Id.AO, the assessee company challenged the same before Ld. CIT (A) which was dismissed by him. Thereafter, the matter was carried in further appeal by the assessee to the ITAT, Delhi. The Tribunal was of the view that the issues raised by the assessee company had not been properly appreciated by the lower authorities and therefore required fresh examination. Accordingly, the matter relating to disallowance of interest of Rs. 10832532/- was set aside by the Tribunal with the directions to examine the issue in the light of judgment of Hon'ble Delhi High Court in the cases of Orissa Cement Ltd and Elmer Havell Electrics & Others. In the light of aforesaid directions of the Hon'ble Tribunal, the impugned assessment order has been framed by the Ld. Assessing Officer

Citation :
M/s Modi Entertainment Ltd.,49, Community Centre,New Friends Colony,New Delhi - 110025 (PAN: AAACM 8283G)(Appellant)Vs. DCIT, Circle 5(1),C.R. BUILDING,NEW DELHI(Respondent)

Daily Limit Reached