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2016 (8) TMI 1217 - ITAT CHANDIGARHDisallowance of Interest u/s 36(1)(iii) - Held that:- As a consequence of the scheme of merger approved all the assets and liabilities of Titan comfine Ltd. Which contained the investments/advances/debtors were merged with the assessee company. The assets as mentioned above were out of the Share Capital of the company raised through Public Issue, hence there was direct nexus between the capital of Titan Comfine Ltd. and the impugned advances/debtors. All evidences in support of its contention was also placed before the AO. No portion of the interest expenditure incurred by the assessee, can be attributed to funds advanced free of interest to the impugned parties and, therefore, no disallowance under section 36(1)(iii) of the Act is warranted in the circumstances. In the result, the appeal of the assessee is allowed.
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