Law:

Section:

Section 256 of the Income-tax Act, 1961 - Reference - Question of fact - Assessee-company made large borrowings from bank for investment on a new project -New project was set up under a separate industrial licence and land, building and machinery were kept separate from existing business installations - In original assessment years 1966-67 to 1968-69 ITO allowed interest on aforesaid overdraft - In the years 1969-70 and 1970-71 ITO disallowed proportionate interest on amount of overdraft utilised in new project as it was a new project and not an extension of assessee's existing business - Tribunal confirmed ITO's order holding that new project was separate and distinct from assessee's business - Whether assessee could not contend on reference that Tribunal should have considered as to whether there was any dovetailing or interlacing of existing business and new project when that point was not made out before Tribunal - Held, yes - Whether Tribunal's finding was a finding of fact and it was justified in disallowing interest - Held, on facts, yes - Whether question that a project of assessee is separate and distinct from assessee's existing business is a question of fact - Held, yes Section 147(b) of the Income-tax Act, 1961 - Reassessment - Information - Whether tin basis of facts given under heading 'Business expenditure - Allowability of ITO was justified in reopening assessment for assessment years 1966-67 to 1968-69 -Held, on facts, yes FACTS The ITO in course of proceedings for the assessment year 1969-70 came to know that the assessee-company had made large borrowings from bank for investments on a new project for the manufacture of a drug. The assessee-company obtained an industrial licence from the Government for that project. During the previous year relevant to the assessment years 1966-67 to 1968-69, a portion of borrowings from bank on overdraft were invested on the project and during the previous year relevant to the assessment year 1969-70 the assets of that project consisting of land, building, machinery, etc., were transferred at book value to a new company D, in which the assessee and its sister concern, held more than 51 per cent of the shares.…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492