2005 (4) TMI 32 - ALLAHABAD HIGH COURT

Disallowance of interest - held that where the amount of any interest-free loan is sufficiently covered by the non-interest-bearing funds available with the assessee, the question of disallowance of interest on borrowed funds does not arise. It is also not the case of the Revenue that any amount borrowed from the bank on which the liability for payment of interest-free advance was there with the respondent-assessee, had not utilized for the purposes of business. - Tribunal was justified in confirming the deletion of Rs. 1,81,000 being disallowance of interest