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2013 (8) TMI 341 - AT - Income TaxDisallowance u/s 14A - Deduction of interest u/s 36(1)(iii) - Interest expenditure paid to bankers - Held that:- First Appellate Authority has deleted the disallowance on the ground that assessee has more surplus interest free funds than the advances and investment. In other words on the record Assessing Officer failed to establish that interest bearing funds were used either for making advances to the sister concern or for investment in the mutual funds. If that be so, then how disallowance can be made. The stand of the Assessing Officer is that assessee should have used its own fund instead of interest bearing borrowings for running the business. In our opinion, Assessing Officer cannot force the assessee to earn interest income or save interest expenses for running the business. The Assessing Officer was unable to demonstrate that interest bearing loans were used by the assessee other than business purpose - Following decision of S.A. Builders Ltd. Vs. CIT [2006 (12) TMI 82 - SUPREME COURT] - Decided against Revenue.
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