Page 19 - DTPA Journal December 21

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Principal Commissioner of Income-tax v. Shiv free loans or for making any investments, impugned
Salai& Sons (I) Ltd. - [2020] 121 taxmann.com 28 disallowance of interest claim of assessee was
(Madras) unjustified .
Suppression of sale : Where Assessing Officer holding
that cash sales of bullions were effected by assessee by SECTION 43(5) OF THE INCOME-TAX ACT,
quoting low rates as against sales effected against 1961 - SPECULATIVE TRANSACTIONS
jewellery made addition for suppression of sales,
however, Tribunal after taking note of number of Principal Commissioner of Income Tax,
instances where assessee had charged lesser on its Coimbatore v. Precot Meridian Ltd. - [2020] 120
jewellery customers than for cash sales and also finding taxmann.com 429 (Madras)
that there was no additions for supression of sales for
other assessment years deleted said addition, impugned Foreign exchange derivative loss : Loss incurred on
order of Tribunal was justified. foreign exchange derivative cannot be disallowed
holding it to be a speculative loss .
SECTION 5 OF THE INCOME-TAX ACT, 1961 -
INCOME - ACCRUAL OF SECTION 68 OF THE INCOME-TAX ACT, 1961 -
CASH CREDIT
Principal Commissioner of Income-tax v. Shiv
Salai& Sons (I) Ltd. - [2020] 121 taxmann.com 28 Principal Commissioner of Income-tax v. Shiv
(Madras) Salai& Sons (I) Ltd. - [2020] 121 taxmann.com 28
Time of accrual - Business receipts : Where Assessing (Madras)
Officer made additions on account of credit/debt notes Loans : Where Tribunal clearly noted fact that amount
for receivables issued by a company in favour of received by assessee company from an individual was
assessee, since there was an arbitration proceedings towards repayment of earlier advances given by
pending between assessee and said company regarding assessee when it business was runing as a
such receivables, Tribunal rightly held that addition on proprietorship concern and transactions in respect of
account of such credit notes/debt could be made only in same were also reflected in accounts of proprietorship
assessment year in which arbitration proceedings concern, no additions could be made on account of
would reach finality and liability of assessee would be such repayment of loan amount received by assessee
crystalised . after converting into a company as unexplained cash
credit .
SECTION 36(1)(iii) OF THE INCOME-TAX ACT,
1961 - INTEREST ON BORROWED CAPITAL SECTION 69 OF THE INCOME-TAX ACT, 1961 -
UNEXPLAINED INVESTMENTS
Principal Commissioner of Income-tax v. Shiv
Salai& Sons (I) Ltd. - [2020] 121 taxmann.com 28 Associated Capsules Pvt. Ltd. v. Assistant
(Madras) Commissioner of Income Tax, Circle-42, Mumbai -
Interest free advances/loans : Where assessee had [2020] 121 taxmann.com 103 (Mumbai - Trib.)
substantial capital built over various years and was also Paintings : Where during search operation at premises
having substantial interest free advances and there was of assessee, 288 paintings were found but Assessing
nothing on record to show that any interest bearing Officer noted that description of paintings mentioned
funds were diverted by assessee for giving any interest on vouchers given by assessee did not match and were

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