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Dcit, Jaipur vs M/S Bhuramal Rajmal Surana(Mfrs.), ... on 21 February, 2017

43. Regarding ground No. 4 of the Revenue's appeal, the facts of the case are that during the course of assessment proceedings, the AO observed that the assessee has taken unsecured loan of Rs. 13,56,69,991/- and has paid interest amounting to Rs. 1,58,28,017/-. It was further observed by the AO that assessee has advanced an amount of Rs. 42,21,000/- to his sister concern M/s Arpan Infin Pvt. Ltd., without any interest. A show cause notice was accordingly issued by the AO as to why interest @ 12% which comes to 31 ITA No. 882 & 906/JP/2012 ACIT, Jaipur vs. Shri Yogendra Khandelwal, Jaipur Rs. 5,06,520/- be not added to the total income. In response, the assessee submitted that the proprietor capital is of Rs. 2,52,33,263/- which is more than the advance given by us and because of family/sister concern, no interest was charged. The response of the assessee was however not found satisfactory and interest of Rs. 5,06,520/- was disallowed and brought to tax in the hands of the assessee.
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