Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (10) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 1517 - HC - Income TaxDisallowance of interest u/s 36(1)(iii) in respect of interest free advances - CIT(A) deleted the disallowance - Held that:- Three appeals preferred by the revenue in relation to assessment years 1993-94, 1994-95 and 1995-96 were heard together by the Tribunal and by a common order dated 01.11.2006, the Tribunal dismissed all the three appeals by following its decision in the case of ACIT v. Torrent Financiers, (2001 (6) TMI 165 - ITAT AHMEDABAD-A ) wherein it was held that if the total interest free advances including debit balance of partners of assessee firm do not exceed the total interest free funds available with the assessee, no interest is disallowable on account of utilization of funds for non-business purpose. The Tribunal noticed that the Commissioner (Appeals) had after examining the details furnished by the assessee, gave a categorical finding that the non-interest bearing funds available with the assessee were sufficient to cover up the interest free advance. The Tribunal agreed with the concurrent findings of fact recorded by the Commissioner (Appeals) and noted that the assessee had interest free funds which were sufficient to cover the interest free loans. Besides, the Assessing Officer had not made out any case that the assessee had utilized borrowed funds other than for business purposes and upheld the deletion of allowance by the Commissioner (Appeals). - Decided in favour of assessee.
|