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2016 (9) TMI 1606 - AT - Income TaxDisallowance of interest on account of the loan/advances to its three Directors - Whether direct nexus between the advances given to the Directors and the assessee's own fund developed ? - HELD THAT:- The contention raised by the revenue that own fund has been utilized for the purpose of fixed assets was not accepted by the Hon'ble High Court and it was held that if there are funds available both interest free and loan then the presumption would arise that the investment would be out of interest free fund generated or available with the company if the interest free fund was sufficient to meet the investment. We are of the view that the judgment in the case of CIT Vs. Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] is applicable in the facts of the present case. Accordingly, following the judgment of Hon'ble Bombay High Court (supra), addition made by the Assessing Officer in question is deleted. Appeal of the assessee is allowed.
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