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2018 (5) TMI 799 - ITAT DELHIDisallowance of interest expenditure - assessee has given interest free funds and advances and share capital to various sister concerns - interest bearing funds have been diverted by the assessee towards non-interest-bearing loans and advances - Advances not utilized for business purposes - direct nexus of the borrowing made by the appellant to the interest free advances given to some of the parties - Held that:- Advances even if it is presumed that they are not given by the assessee for the business purposes they do not exceed the funds available with the assessee without interest. Investment made by the assessee in Gaursons Realtech Pvt Ltd of ₹ 53.22 crores and advance of ₹ 79.65 crores totaling to ₹ 132.87 crores is given by the assessee for the purpose of the business of the assessee and no disallowance of interest on these advances can be made. The advance of ₹ 85944137/- is interest beaing advance on which interest has been charged and therefore, it cannot be included in the interest free advances given by the assessee. A sum of ₹ 52.36 crores given to holding company of the assessee M/s. Gausons India Ltd for acquiring plot of land from Ghaziabad Development Authority cannot also be included for the purpose of interest disallowance for the reasons given by us above. Even otherwise the above amount of advance of ₹ 52.36 crores coupled with other advances of ₹ 8.5 crores are far less than the interest free funds available with the assessee. Thus no disallowance of interest could be made - Decided in favour of assessee
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