M/S. TRIDOSS LABORATORIES PRIVATE LTD.,MUMBAI vs. ACIT CENT. CIR. - 14, MUMBAI

ITA 1462/MUM/2018Status: DisposedITAT Mumbai20 October 2022AY 2002-0316 pages
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What did the Tribunal hold?

The Tribunal held that the assessee was justified in not charging interest on loans to certain parties due to their poor financial condition and doubtful recovery of principal. For other parties, the interest-free advances were covered by the assessee's own funds.

What were the facts?

The assessee paid interest on borrowed funds but also provided interest-free loans to various parties. The Assessing Officer disallowed the entire interest expenditure, considering it a diversion of borrowed funds for non-business purposes.

What were the issues?

Whether interest paid on borrowed funds is allowable when interest-free advances are given to other parties, and if so, to what extent.

Which sections of the Income-tax Act were involved?

Section 36(1)(iii),Section 37

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Cases cited in this judgment(8)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, ‘E‘ BENCH

Before: SHRI M.BALAGANESH & SHRI RAHUL CHAUDHARYDr.

For Appellant: Shri M.P.Lohia / Nikhil Tiwari
For Respondent: Shri Chintamani V. Divgankar
Hearing: 28/09/2022Pronounced: 20/10/2022

PER M. BALAGANESH (A.M): These cross appeals in & 1462/Mum/2018 for A.Y.2002-03 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-14. Mumbai in appeal No.CIT(A)-

2 ITA No. 1489/Mum/2018 & ITA No.1462/Mum/2018 M/s. Tridoss Laboratories Pvt Ltd.,

14/IT-69/05-06 dated 29/12/2017 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax

The order continues below.

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