JCIT (OSD) CIRCLE-8(3)(1), MUMBAI vs. M/S. TRIDOSS LABORATORIES PRIVATE LTD., MUMBAI
What did the Tribunal hold?
The Tribunal held that for certain parties where principal recovery was doubtful, not charging interest was justified. For other parties, the interest-free advances were covered by the assessee's own funds, making the disallowance unsustainable.
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 disallowable when interest-free advances are given to related parties, and whether such advances are for business purposes.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(8)Show listHide 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.
- CIT v. Reliance Utilities & Power Ltd.2,118 citing313 ITR 340 · 2009 · HC
- CIT v. HDFC Bank Ltd.1,261 citing366 ITR 505 · 2014 · HC
- CIT v. Shoorji Vallabhdas & Co.551 citing46 ITR 144 · 1962 · SC
- Godhra Electricity Co. Ltd. v. CIT514 citing225 ITR 746 · 1997 · SC
- CIT v. Bokaro Steel Ltd.370 citing236 ITR 315 · 1999 · SC
- E.D. Sassoon & Co. Ltd. v. CIT256 citing26 ITR 27 · 1954 · SC · Read judgment
- CIT v. Sridev Enterprises125 citing192 ITR 165 · 1991 · HC
- 236 ITR 315; CIT v. Sarabhai4 citing307 ITR 89 · SC
Income Tax Appellate Tribunal, ‘E‘ BENCH
Before: SHRI M.BALAGANESH & SHRI RAHUL CHAUDHARYDr.
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
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