M/S. LMJ OVERSEAS LTD.,KOLKATA vs. ITO, WARD-8(3), KOLKATA, KOLKATA

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ITA 1947/KOL/2014Status: DisposedITAT Kolkata11 December 2015AY 2007-20082 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee failed to produce evidence for business expediency before the lower authorities. However, new evidence was filed before the Tribunal, requiring verification.

What were the facts?

The assessee company borrowed Rs. 1.5 crore from a bank and transferred it to a sister concern without charging interest. The Assessing Officer disallowed the interest expenses claimed by the assessee.

What were the issues?

Whether the disallowance of interest expenses on funds transferred to a sister concern without interest is justified, especially when new evidence is presented.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” “C” BENCH: KOLKATA

Before: Shri Mahavir Singh, JM]

Hearing: 07.12.2015Pronounced: 11.12.2015

Date of hearing: 07.12.2015 Date of pronouncement: 11.12.2015 For the Appellant: N o n e For the Respondent: Shri Rajendra Prasad, JCIT, Sr. DR ORDER This appeal by assessee is arising out of order of CIT(A)-VIII, Kolkata vide Appeal No. 306/CIT(A)-VIII/Kol/09-10 dated 19.08.2014. Assessment was framed by ITO, Wd-8(3), Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 2007-08 vide his order dated 31.12.2009.

2.

The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of AO in disallowing the interest expenses amounting to Rs.10,18,139/-.

3.

I have heard Ld. Sr. DR and gone through facts and circumstances of the case. I find that the assessee has borrowed a sum of Rs.1.5 cr. from the bank and transferred the same to a sister concern LMJ Distributors Pvt. Ltd. without charging any interest. The assessee claimed before the AO as well as before CIT(A) that this loan is given out of business expediency but he failed to produce any evidence. I find that the assessee filed evidences before me in respect to loan advanced to sister concern LMJ Distributors Pvt. Ltd. and purpose of the same. As these evidences are new evidences and these require verification, hence, this issue needs reconsideration at the level of AO. Hence, I set aside the issue to the file of AO for reconsideration. Appeal of assessee is allowed for statistical purposes.

4.

In the result, the appeal of assessee is allowed for statistical purposes. 5. Order is pronounced in the open court on 11.12.2015

Sd/- (Mahavir Singh) Judicial Member Dated : 11th December, 2015 Jd.(Sr.P.S.)

2 LMJ Overseas Ltd. AY 2007-08 Copy of the order forwarded to: APPELLANT – M/s. LMJ Overseas Ltd., 30, Jawaharlal Nehru Road, 2nd 1. Floor, Kolkata-16. 2 Respondent – ITO, Wd-8(3), Kolkata. 3. The CIT(A), Kolkata 4. CIT , Kolkata 5. DR, Kolkata Benches, Kolkata

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