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2020 (1) TMI 688 - ITAT DELHIDisallowance on account of interest u/s 36(1)(iii) - assessee-company has given interest free loans and advances to related party - HELD THAT:- In A.Y. 2011-2012 the Ld. CIT(A) has allowed the claim of assessee and deleted the addition, copy of the Order is placed in the paper book. Though the Department has filed an appeal before the Tribunal, but, no ground have been raised on this issue. Copy of the grounds of appeal is also filed on record. These facts itself are sufficient to delete the addition. We may further note that assessee has own sufficient funds to give advance to M/s. Prateek Resorts & Builders Pvt. Ltd., out of own funds. There was also an opening balance as contended by the Learned Counsel for the Assessee in preceding year, on which, addition has already been deleted. The assessee has also placed on record the correspondence between the parties to show that advance have been given for commercial expediency. It is well settled Law that when interest free funds are available to the assessee which were sufficient to made its investments, it would be presumed that the investments were made from the interest free funds available with the assessee. We rely upon case of Reliance Utility and Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] and Reliance Industries Ltd. [2019 (1) TMI 757 - SUPREME COURT] and Munjal Sales Corporation [2008 (2) TMI 19 - SUPREME COURT] . Considering the totality of the facts and circumstances of the case, we do not find any justification to sustain the addition. Disallowance under section 14A read with Rule 8D - HELD THAT:- In I.P. Support Services India Ltd. [2015 (10) TMI 752 - DELHI HIGH COURT] held that “no disallowance be made in the absence of satisfaction as to why voluntary disclosure made by assessee was unreasonable and unsatisfactory.” - Thus in the absence of any satisfaction recorded by the A.O. for making disallowance under section 14A read with Rule 8D of the I.T. Act, no disallowance could be made in the case of the assessee. We, accordingly, set aside the Orders of the authorities below and delete the entire addition. - Decided in favour of assessee.
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