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1 - 4 of 4 (0.25 seconds)Commissioner Of Income-Tax vs United General Trust Ltd. on 19 February, 1993
Subsequently the
AO in the assessment made u/s 143(3) read with section 147 of the Act disallowed the
proportionate management expenses as computed by him amounting to Rs.80,73,295/-
The average rate of interest on the average loan @ 7.49% on identical ground and
reasoning the income tax assessment for A.Yr.2000-01 was also reopened by the AO
on 3rd December, 2003 relying on the decision of the Hon'ble Supreme Court in the
case of CIT vs United General Trust Ltd. (supra). When this matter went before the ld.
CIT(A) the ld. CIT(A) has given a finding that there was no material on record which
in any manner that borrowed funds were utilised by the assessee for making
investment in shares. Unless the nexus between the expenditure and the earning of the
dividend from investment in shares were proved, disallowance on estimate basis
cannot be made. The ld. CIT(A) quashed the re-assessment. On further appeal the
Tribunal upheld the order of the CIT(A) vide its order dated 28th April, 2006. The
assessee acquired shares of the wholly subsidiary company in the A.Yr.1998-99.
Therefore there was no finding that the investment in the subsidiary was made out of
the borrowed funds in A.Yr.1998-99 to A.Yr.2002-03 and also in A.Yr.2004-05. We
noted that in A.Yr.2005-06 the AO has made similar disallowances which was deleted
by the ld. CIT(A), against which the revenue has not filed any appeal. During the
impugned year also we noted that the ld. CIT(A) has given a categorical finding that
the investment in the subsidiary company was made in the financial year 1997-98 and
thereafter no further investment was made by the assessee in the subsidiary company.
It is not a case where the borrowed funds were utilized by the assessee for acquiring
ITA No.221/Kol/2012& C.O.27/Kol/2012 4
DIC India Ltd.
Section 148 in The Income Tax Act, 1961 [Entire Act]
Section 80M in The Income Tax Act, 1961 [Entire Act]
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