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2016 (4) TMI 808 - AT - Income TaxDisallowance of interest made u/s 36(1)(iii) - Held that:- In the present appeal, the accounts were mixed and the disallowance was made by the ld. Assessing Officer on the plea that the assessee could not prove that only surplus funds were given for acquisition of fixed asset. However, the claim of the assessee is that the own networth of the assessee is 124.54 crores and unsecured interest free loans from the promoter was ₹ 74.78 crores and even the current year net profit is much more than the investment in capital asset. The ratio laid down in CIT vs Reliance Utilities and Power Ltd (2009 (1) TMI 4 - BOMBAY HIGH COURT ), wherein, the assessee was having sufficient interest free funds of its own and apart from substantial share holder funds, it is presumed that investment in sister concern were made by the assessee out of interest free funds, thus, no part of interest on borrowings can be disallowed on the basis that investment were made out of interest bearing funds, supports the case of the assessee. Disallowance of interest made u/s 36(1)(iii) deleted - Decided in favour of assessee
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