INDIA INFRASTRUCTURE AND LOGISTICS INDIA PVT. LTD.,MUMBAI vs. ACIT 6(1), MUMBAI

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ITA 3134/MUM/2019Status: DisposedITAT Mumbai12 August 2022AY 2009-1011 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had demonstrated commercial expediency for the interest-free advances, as the land acquired was used for its business operations. The advances were also found to be made from the company's own interest-free funds.

What were the facts?

The assessee company granted interest-free loans to its subsidiary companies to acquire land for setting up an inland container depot. The Assessing Officer disallowed the interest expenses on borrowed funds, deeming the advances to be for non-business purposes without commercial expediency. The CIT(A) upheld this disallowance.

What were the issues?

Whether the disallowance of interest expenses on borrowed funds used for interest-free advances to subsidiary companies was justified on grounds of lack of commercial expediency and availability of own funds.

Which sections of the Income-tax Act were involved?

Section 36(1)(iii)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SHRI AMARJIT SINGH & MS. KAVITHA RAJAGOPAL

Hearing: 28.07.2022Pronounced: 12.08.2022

आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. संबंधधत आयकर आयुक्त / The CIT(A) 4. आयकर आयुक्त(अपील) / Concerned CIT धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, अहमदाबाद / DR, ITAT, Mumbai 5. 6. गार्ड फाईल / Guard file.

आदेशानुसार/BY ORDER, सत्याधपत प्रधत //True Copy//

(Asst. Registrar) ITAT, Mumbai

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