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Learn More13 Intas Pharmaceuticals Ltd vs. ACIT
[2024] 159 taxmann.com 429
(Ahmedabad —Trib.)
ITA No: 1334/AHD/2017 & Others
A.Ys.: 2009–10 to 2011–12
Date of Order: 31st January, 2024
Section 92C, read with section 92B, of the Income-tax Act, 1961 — Interest-free loan is an international transaction. The nature of advances, whether it is quasi capital in nature or not, must be seen at the time of granting of advance/loan to the subsidiary.
FACTS
Assessee is engaged in the business of manufacturing and trading of pharmaceuticals. It advanced the amount to its AEs for registration of the assessee’s product in overseas territories. Assessee had the option to convert advances into equity. Hence, the assessee considered that the advances were in the nature of quasi capital. Therefore, the assessee did not charge Interest on the same. In the subsequent year, the assessee converted loans given to three of its AEs into equity.
In the course of the assessment, AO made an upward