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2015 (2) TMI 205 - HC - Income TaxDisallowance of interest made by the Assessing Officer u/s. 36(1)(iii) - whether interest free funds were available with the assessee? - Held that:- Tribunal was justified in holding that interest free funds were available with the assessee and thereby deleting the disallowance of interest made by the Assessing Officer u/s. 36(1)(iii) of the Act. The Tribunal has rightly considered that the assessees have clearly demonstrated that it had interest free funds available and the balance amount of interest free advances after reducing the advance of M/s. Mehta Financiers was given for purchase of shares. The Tribunal proceeded on the footing that if total interest-free advances including debit balances of partners do not exceed the total interest-free funds available with the assessee, no interest is disallowable on account of utilisation of fund for non-business purposes and if it exceeds, the proportionate disallowance can be made. We are in complete agreement with the findings of fact arrived at by the Tribunal. - Decided in favour of assessee.
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