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August 2023

Section 250, Rule 46A

By Jagdish T Punjabi, Chartered Accountant
Devendra Jain, Advocate
Reading Time 4 mins
21. DCIT vs. Ansaldo Caldaie Boilers India Pvt Ltd ITA No. 1999/Chny/2019 A.Y.: 2015-16 Date of Order: 21st June, 2023 Section 250, Rule 46A FACTS
The assessee filed its return of income for the A.Y. 2015-16 on 30th November, 2015 admitting NIL income and claiming current year loss of Rs. 7,87,45,865/-. In the course of assessment proceedings, the AO noted that (i) the assessee has claimed a sum of Rs. 8,59,47,532 as finance cost for the year under consideration; (ii) the interest bearing funds borrowed by the assessee as on 31st March, 2015 include long term loans at Rs. 32,18,49,972 and the short term loans at Rs. 19,92,21,313 totaling to Rs. 52,10,71,285; (iii) the assessee has incurred interest expenses to the tune of Rs. 8,59,47,532 as finance cot in respect of the above borrowings and has charged off the same to profit and loss account; (v) the assessee has advanced a sum of Rs. 15,00,00,000 as advance for purchase of land for which an agreement has been entered into but no registration has been taken place and therefore, the asset has not put to use by the assessee; (vi) from the balance sheet, the AO has noted that the assessee has utilised interest bearing funds for the advance given for purchase of land. The AO asked the assessee to show-cause as to why proportionate interest should not be di
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