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2016 (11) TMI 1056 - AT - Income TaxDisallowance of interest on account of interest free loan given to its associate company - Held that:- From the submission of the assessee we find that the sufficient fund was available with the assessee as discussed above to advance the money to its associate concern. The ld. DR has not brought anything contrary to the arguments of the ld. AR. Therefore, in our considered view, the authorities below should have disallowed the interest expenses rather than charging interest income on notional basis. In the instant case, the interest expense claimed by assessee but AO instead of disallowing the interest has added the interest income on notional basis which was not the dispute from the facts of the case. In this connection, we rely in the decision of Hon'ble jurisdictional High Court in the case of CIT vs. Rungamatee Trexim (Pvt) Ltd. [2008 (12) TMI 759 - CALCUTTA HIGH COURT] Respectfully following the decision of Hon'ble jurisdictional High Court we reverse the orders of Authorities Below and we allow ground of assessee’s appeal.
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