TMI Blog2014 (9) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... roved or upheld, if only he was able to demonstrate that what was advanced by the respondent to its sister concern was nothing but the amount borrowed from the financial institution - It is not uncommon that even where an entrepreneur is possessed of resources to establish a business undertaking, borrowing of the amount for that very purpose may prove to be beneficial to him - once it emerges that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction on the ground that the respondent lent and advanced substantial amounts to its sister concern, without charging interest. Aggrieved by the order of assessment, the respondent filed appeal before the Commissioner of Appeals. The Commissioner allowed the appeal through order, dated 31.01.1996. The said order was challenged by the Revenue before the Visakhapatnam Bench of the Income Tax App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts sister concern itself and thereby the respondent is not entitled to claim deduction of interest. Sri A.V. Krishna Koundinya, learned counsel for the respondent, on the other hand, submits that the Revenue failed to establish that there was any nexus or link between the amount borrowed by the respondent from the financial institution on the one hand and the amount advanced by it to its sister ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to its sister concern without levying interest. From that fact, the assessing officer inferred that the amount from the financial institution was not borrowed by the respondent for its business and on the other hand, the real beneficiary is the sister concern. The conclusion of the assessing officer could have been approved or upheld, if only he was able to demonstrate that what was advanced by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that are in force at the relevant point of time. Once it emerges that the assessing officer did not record any finding to the effect that the respondent has borrowed the amount on interest and straight away passed on it to the sister concerned, without levying interest, there was no way he could have disallowed the interest. We do not find any basis to interfere with the order of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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