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2017 (2) TMI 696 - AT - Income TaxDisallowance u/s 36(1)(iii) - Held that:- We find that this issue stands settled in view of the decision of the Jurisdictional High Court in the case of Bright Enterprises Pvt. Ltd.(2015 (11) TMI 342 - PUNJAB & HARYANA HIGH COURT) wherein at para 16 of the order it was categorically held that where the funds/reserves were sufficient to cover interest free advances, the presumption that would arise was that the investments were made out of interest free funds generated or available with the company. Thus we find merit in the contention of the assessee that in view of the sufficient interest free own funds available with the asessee, the investments in the present case are to be presumed to have been made out of the same. Further once it has been held that the investments have been made by utilizing the own interest free funds of the assessee, it automatically means that for the purpose of making the investments, no interest expenditure has been incurred by the assessee. When no interest expenditure have been incurred by the assessee, issue of allowance of the same under section 36(1)(iii) of the Act does not arise at all, since section 36(1)(iii) of the Act deals with the circumstances or the conditions subject to which interest expenditure are to be allowed. Since in the present case, the investments have been presumed to made out of own funds, clearly no interest expenditure has been incurred for making the same and, therefore, no question of allowability/disallowability of the same arises under section 36(1)(iii) of the Act - Decided in favour of assessee
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