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2015 (7) TMI 397 - AT - Income TaxDisallowance of interest expenses holding advances granted by the assessee to be not out of commercial expediency - CIT(A) deleted the interest - Held that:- CIT(A), while granting relief to the assessee, has noted that the assessee has given interest free advances to those parties with whom the assessee was having regular business transactions and some of them were suppliers of raw-material and packing material and the advance was made for purchase of material. He also noticed that most of the advances were given in earlier years and there were few transactions done during the year under consideration. The ld. CIT(A) has further given a finding that the assessee had no liquid funds for its day to day business transactions and did not make any borrowing during the year nor any new advances were granted by the assessee and the advances, which were granted in earlier years, were in connection with the business of the assessee. The ld. CIT(A) has also noted that no disallowance on account of interest was made by the Assessing Officer in earlier years and after examining the various loans and advances in the light of the ratio laid down by the Hon'ble Apex Court in the case of S.A. Builder Ltd. (2006 (12) TMI 82 - SUPREME COURT ) has given a categorical finding that the loans and advances given by the assessee were for business purposes. Before us, the Revenue has not brought any material on record to controvert the findings of the ld. CIT(A). Thus no reason to interfere with the order of the ld. CIT(A) for both the years under consideration. - Decided against revenue.
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