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2016 (1) TMI 896 - AT - Income TaxDisallowance of interest payment - CIT(A) deleted the addition - whether the assessee failed to discharge the onus cast on him to prove the genuineness that the interest payment was not diversion of interest bearing funds to non interest bearing loans and advances - Held that:- The only question raised by A.O. in his assessment order is reasons for not charging interest under loans and advances shown in the balance sheet at ₹ 2,02,81,372/- and the same has been properly replied by the assessee along with supporting evidences which amicably justify that assessee was having sufficient source of interest free funds. Further, most of the interest free loans /advances, were for the business purposes. Out of total loans and advances as on 31.03.2009 shown at ₹ 2,06,81,372/- only a sum of ₹ 1,18,70,000/- was fresh loan given during the year and further out of ₹ 1,18,70,000/-, a sum of ₹ 91,50,000/- was given for real estate business and only a sum of ₹ 27,20,000/- was given as interest free loans and advances. The assessee has agreed for addition on interest of ₹ 1,30,254/- on the fresh loans of ₹ 27lacs given to M/s. Akshar Info Service (P) Ltd. calculated on the basis of days for which loans were given. Further, after reducing ₹ 1,18,70,000/- on the total loan advance of ₹ 2,06,81,372/-, the remaining amount comes to ₹ 88,11,372/- and out of this remaining amount of ₹ 88,11,372/-, assessee has already shown interest income of ₹ 10,40,040/- from old loan of ₹ 81,55,873/-. Thus we are of the view that assessee has proved the genuineness of interest payment and also proved that there was no diversion of interest bearing fund to non interest bearing loans and advances. - Decided in favour of assessee.
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