SWARANSINGH GYANSINGH SOHAL,PUNE vs. INCOME-TAX OFFICER, WARD -2(2), PUNE

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ITA 1537/PUN/2017Status: DisposedITAT Pune04 May 2022AY 2011-128 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the interest paid for extra commercial considerations, routed through journal entries to create an artificial loss, cannot be allowed as a deduction. However, the calculation of the disallowance was revised.

What were the facts?

The assessee made transfers through journal entries from a firm eligible for Section 80IB deduction to other firms not eligible for the same. This resulted in interest expenditure in the assessee's hands and interest income in the eligible firm's hands, creating an artificial loss.

What were the issues?

Whether interest expenditure incurred through artificial transactions to claim deduction under Section 80IB is allowable. Whether disallowance under Section 14A is warranted when exempt income is earned but no disallowance is offered.

Which sections of the Income-tax Act were involved?

Section 80IB,Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH ‘B’ PUNE

Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY

For Appellant: Smt. Deepa Khare
For Respondent: Shri M.G. Jasnani

आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant; 2. प्रत्यर्थी / The Respondent; 3. The CIT(A), Pune-5, Pune 4. The PCIT, Pune-4, Pune 5. DR, ITAT, ‘B’ Bench, Pune 6. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 02-05-2022 Sr.PS 2. Draft placed before author 04-05-2022 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *

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