Case Law Analysis
|Income Tax Appellate Tribunal
Section 92B & 36(1)(iii) IT Act | Preference Shares Cannot Be Reclassified as Loans Without Exceptional Evidence; Own Funds Presumption Upheld : ITAT Mumbai
ITAT Mumbai rules that redeemable preference shares without dividend payments cannot be reclassified as loans under transfer pricing provisions unless exceptional evidence proves otherwise. The tribunal also upheld the presumption that own funds are used for advances, rejecting disallowance under Section 36(1)(iii) where assessee's funds were already invested in fixed assets.