IT Where assessee used premises of other person for storage purpose and being actual user of premises paid electricity expenses for it, said expenses were allowable as business expenses
IT Where assessee proved that he had trade dealings with persons to whom advances were made and looking to business expediency, interest needed not to be charged, no part of interest paid by assessee on borrowed fund could be disallowed
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[2014] 49 taxmann.com 486 (Rajasthan)
HIGH COURT OF RAJASTHAN
Commissioner of Income-tax
v.
Jugal Kishore Dangayach*
AJAY RASTOGI AND J.K. RANKA, JJ.
IT APPEAL NO. 101 OF 2011†
NOVEMBER 22, 2013
I. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Electricity expenses) - Assessment year 2006-07 - Assessee was carrying on business of pulses - For storage purpose, he used premises of one 'K' and being actual user of it paid electricity expenses - Whether on mere facts that area was under construction, that assessee did not inform other Government agencies about being actual user of premises owned by 'K', electricity expenses paid by assessee could not be disallowed - Held, yes [Para 7] [In favour of assessee]
II. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Interest) - Assessment year 2006-07 - Assessing Officer disallowed interest paid by assessee observing that assessee had advanced huge amount to related company 'T' and other related persons without charging interest and there was no business expediency - It was an admitted fact that assessee had huge trade credits on which no interest was being paid and he had received advances from customers on which no interest was paid - Further, assessee proved that he had trade dealings with persons to whom advances were made and then looking to business expediency, he was not required to charge interest - Whether on facts, interest paid by assessee was allowable deduction - Held, yes [Para 12] [In favour of assessee]
__._,_.___
IT Where assessee proved that he had trade dealings with persons to whom advances were made and looking to business expediency, interest needed not to be charged, no part of interest paid by assessee on borrowed fund could be disallowed
■■■
[2014] 49 taxmann.com 486 (Rajasthan)
HIGH COURT OF RAJASTHAN
Commissioner of Income-tax
v.
Jugal Kishore Dangayach*
AJAY RASTOGI AND J.K. RANKA, JJ.
IT APPEAL NO. 101 OF 2011†
NOVEMBER 22, 2013
I. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Electricity expenses) - Assessment year 2006-07 - Assessee was carrying on business of pulses - For storage purpose, he used premises of one 'K' and being actual user of it paid electricity expenses - Whether on mere facts that area was under construction, that assessee did not inform other Government agencies about being actual user of premises owned by 'K', electricity expenses paid by assessee could not be disallowed - Held, yes [Para 7] [In favour of assessee]
II. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Interest) - Assessment year 2006-07 - Assessing Officer disallowed interest paid by assessee observing that assessee had advanced huge amount to related company 'T' and other related persons without charging interest and there was no business expediency - It was an admitted fact that assessee had huge trade credits on which no interest was being paid and he had received advances from customers on which no interest was paid - Further, assessee proved that he had trade dealings with persons to whom advances were made and then looking to business expediency, he was not required to charge interest - Whether on facts, interest paid by assessee was allowable deduction - Held, yes [Para 12] [In favour of assessee]
__._,_.___
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