Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (2) TMI 1157 - ITAT AGRADisallowance of interest u/s 36(1)(iii) - Assessee has sufficient funds - held that:- Following decision of assessee's own previous case [2012 (9) TMI 228 - ITAT, AGRA] - The assessee has sufficient capital, profit and interest-free funds available with him for the purpose of investment. No nexus between the borrowed funds and interest free funds has been established by the AO on record. Therefore, the addition would be unjustified in the year under consideration. - Accordingly, the orders of the authorities below on this issue are set aside and the addition is deleted - it is clear that the assessee has sufficient capital, profit and interest free funds available with him for the purpose of giving interest free loans to the above named persons (sons). No nexus between the borrowed funds and interest free loans have been established by the AO on record. Therefore, disallowance of interest u/s. 36(1)(iii) of the IT Act on proportionate basis is wholly unjustified. We following the earlier order of the Tribunal dated 20.07.2012 set aside the orders of the authorities below and delete the addition of ₹ 1,06,800 - Decided in favour of assessee.
|