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2019 (1) TMI 1664 - AT - Income TaxDisallowance of interest expenses u/s.36(1)(iii) - assessee has not submitted any documentary evidence to prove that interest free funds were available with it at the time(date) when the amounts were advanced to its sister concerns - CIT-A deleted the addition - HELD THAT:- CIT(Appeals) has passed his decision on both factual matrix as well as judicial pronouncement in the case of CIT Vs. Reliance Utilities and Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] as held that where the assessee had adequate interest free funds by way of proprietary capital or by way of interest free deposit for customers, there is an inference that borrowed funds are not diverted for non business purposes. In such circumstances there can be no disallowances. In the case of CIT Vs. Neelkanth Systhetics and Chemicals P. Ltd. [2009 (2) TMI 480 - BOMBAY HIGH COURT] has held that where the loan was taken to repay the liability of the sister concerns, interest of the same is to be allowed on ground of commercial expediency. Furthermore, it is observed that the Assessing Officer could not obtain any details and analyze the same while deciding the issue against the assessee. Accordingly, we do not find any infirmity in the findings of the Ld. CIT(Appeals) and relief provided to the assessee is, therefore, sustained. Hence, grounds raised by the Revenue are dismissed.
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