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2015 (8) TMI 1290 - AT - Income TaxAddition on account of interest free advance given to sister concern - Held that:- It is evident that in assessment year 2006-07, the issue of disallowance of interest u/s 36(i)(iii) of the Act, on interest free advances made to sister concerns was examined by the Assessing Officer and it was held by the Assessing Officer that the interest free advances were made out of interest free funds to the extent available. It was only the excess advances, which were held to be made out of interest bearing funds and the provisions of section 36(i)(iii) of the Act were applied thereon. In the impugned assessment year, on the very same advances, the Revenue seems to be taking a different view, by holding that the entire interest free advances are out of interest bearing funds. There has to be consistency and definiteness in the approach of the Revenue in recognizing the nature of an account so that the basis of a concluded assessment would not be ignored. Having held the interest free advances to be out of interest free funds in assessment year 2006-07, the Revenue cannot now take a totally different view and hold the same advances to be out of interest bearing funds in the impugned year. Even on merits it is clear from the facts stated above, that the assessee had enough interest free funds to advance interest free sums to its sister concern. - Decided against revenue
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