Subscribe To Our Newsletter
IMPORTANT: Please add editor@itatonline.info to your contacts to prevent mails from us going into the Spam/ Junk folder

COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: February 18, 2009 (Date of publication)
AY:
FILE: Click here to download the file in pdf format
CITATION:

Advances to sister concerns must be presumed to have come out of own funds and not borrowed funds.

Where the assessee had its own funds as well as borrowed funds and it advanced funds to its sister concerns for allegedly non-business purposes and the question arose whether the AO was justified in disallowing the interest on the borrowed funds on the ground that they had been used for non-business purposes, HELD:

Where an assessee has his own funds as well as borrowed funds, a presumption can be made that the advances for non-business purposes have been made out of the own funds and that the borrowed funds have not been used for this purpose. Accordingly, the disallowance of the interest on the borrowed funds is not justified.

One Response to “CIT vs. Reliance Utilities (Bombay High Court)”

  1. […] In the case Reliance Utilities & Power Ltd (ITA No 1398 of 2008-order dated 9.1.2009 of Hon’ble Bombay High Court), the assessee made […]


If you are a tax professional, you must sign up for our free newsletter. Why? Because we keep you informed about the latest developments in the world of tax. We focus only on the most important must-read judgements & articles that will impact your day-to-day professional work. You can see a chronological listing of all our postings on twitter & facebook


IMPORTANT: After signing up & clicking on the confirmation mail, send a test/ blank mail to editor@itatonline.info. Why? Because it is the easiest way to add our email address to your address/ contacts book and ensure that our Newsletter does not get sent to the Spam/ Junk folder


Email



Unsubscribe