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2019 (5) TMI 1895 - AT - Income TaxAddition of interest on borrowed funds - proportionate interest on the interest free loan extended to the sister concerns of the assessee - HELD THAT:- In the case of the assessee, the assessee’s equity share capital, general reserves, accumulated profits and Reserves exceeds the interest free loan extended during the relevant assessment years and the same is not in dispute. Therefore the facts in the case of the assessee are identical to the case decided by the Hon’ble Jurisdictional Madras High Court, Hon’ble Bombay High Court, and the Chennai Benches of the Tribunal cited herein above. Hence respectfully following the decision of the higher Judiciary we hereby direct the Ld.AO to delete the addition made by disallowing the proportionate interest towards the interest free loan extended for all the relevant assessment years in appeal before us. It is also pertinent to mention that the decision cited by the Ld.DR in the case K.Somasundram & Bros [1998 (8) TMI 59 - MADRAS HIGH COURT] has no application to the case of the assessee because there is no finding in that case regarding the equity share capital, general reserves, and accumulated profits and Reserves of the assessee company to be in excess of the interest free loan extended. - Decided in favour of assessee.
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