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2014 (11) TMI 218 - ITAT AHMEDABADInterest u/s 36(1)(iii) disallowed – Held that:- CIT(A) found that the assessee has borrowed funds amounting to ₹ 2.09 crores only during the year - no fresh deposits in FDRs were made by the assessee during the year - in the absence of any defect pointed out by the Revenue in the order of the CIT(A) and keeping in view the fact that no fresh investment in FDR was made during the year and keeping in view the fact that no disallowance of interest on borrowed capital was sustained in the case of the assessee in the immediately preceding assessment year on account of its making investments in FDRs, there was no merit in the appeal. CIT(A) upheld the disallowance on his findings that borrowed funds were not required for immediate business needs - the need of business is to be judged from the point of view of businessmen - The assessee is having business turnover of over 211 Crores during the year under consideration - The amount which the assessee may need for his business may not be available always to the assessee - the assessee has to avail the loan amount when it is available by keeping in view the future needs which may arise in the course of business - merely as because the assessee had sufficient own funds on the date of the borrowings it cannot be concluded that borrowings were not for the purpose of business - the disallowance of interest of ₹ 10,71,797/- upheld by the CIT(A) is not sustainable – Decided in favour of assessee.
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