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2012 (5) TMI 639 - AT - Income TaxDisallowance of interest to the advances given to HGPL - Held that:- CIT(A) while deciding this issue has deleted the additions of ₹ 46,64,53,318/-. However, at the same time on the proposed addition of ₹ 27,54,66,028/-, the Ld. CIT(A) has given part relief to the assessee and confirmed the disallowance of proposed interest relateable to advances made within the year on proportionate basis based on the ratio of borrowed funds to total funds. The assessee before us has suo motto calculated such disallowance at ₹ 9,01,98,977/-. To this extent, we find that both the orders of lower authorities are lacking in details regarding break up of interest attributable to the various categories referred to above. So far as the advance to HGPL is concerned, we find that the said advance has direct bearing with the commercial needs of the assessee. Once it has been established that the advances have been made for commercial reasons, no part of interest can be disallowed. Therefore, modifying the order of Ld. CIT(A), the AO is directed to allow the claim of interest
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