JCIT(OSD), Circle-11, Kolkata v. M/s Snowtex Investment Ltd

Parties Involved

Facts Summary

The present appeal was preferred by the revenue against the order dated 26.10.2022 of the National Faceless Appeal Centre (CIT(A)) passed under section 250 of the Income Tax Act. The Assessing Officer had made an addition of Rs.1,81,13,622/- on account of proportionate disallowance of interest expenditure in respect of interest-free loans given by the assessee. The assessee had interest-bearing loans of Rs.34.34 crores and had made interest-free loans and advances of Rs.12.43 crores. The Assessing Officer held that the interest-free advances were not incidental to the business activity of the assessee. The CIT(A) deleted the additions made by the Assessing Officer, leading to the revenue's appeal.…

Legal Issues

• 1. Whether the CIT(A) was correct in deleting the addition made by the Assessing Officer on account of proportionate disallowance of interest expenditure in respect of interest-free loans given by the assessee.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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