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2014 (1) TMI 1275 - ITAT MUMBAIDisallowance of interest reduced u/s 36(1)(iii) of the Act Held that:- There was no occasion to hold that the assessee is inflated the cost of project by Rs.25 lakhs or charging less interest from the sister concern at the rate of 14%, against 15% interest paid by the assessee the amount of Rs.2 crores was directly paid to M/s Vestas RRB (I) Pvt. Ltd. by the bank thus, there is no question of doubting that the same was not for the purpose of business - the entire interest paid by the assessee was for commercial purposes the disallowance set aside Decided in favour of Assessee and against Revenue. Loan amount Held that:- The assessee indulged in financial business and almost the entire loan has been utilized for repayment of other creditors, which was on account of business expediency - The CIT(A) has noted that the repayment of loan was not for business purpose, however, nothing has been brought on record, how the same was not for the business purpose - the case of the assessee required to be considered in right perspective - The loan was not utilized somewhere else other than the business purpose - it cannot be said that the same was not for the business purpose. Disallowance of interest Held that:- The AO has disallowed for the reason that the funds were utilized for non-business purpose - The CIT(A) has not given any finding on this issue - this amount is also allowable for the reason that the loan was taken from the shareholders in earlier years and interest paid in earlier year was not disallowed - there was no reason to disallow the interest on the amount of loan taken from the shareholders paid during the year the addition made deleted Decided partly in favour of Assessee.
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