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2017 (6) TMI 454 - AT - Income TaxDisallowance of interest on loan - lesser rate of interest - income from other sources - Held that:- Hon’ble Bombay High Court in the case of CIT vs. Reliance Utilities & Power Limited (2009 (1) TMI 4 - BOMBAY HIGH COURT) wherein held that if there were funds available both interest-free and overdraft and/or loans taken, then a presumption would arise that investments would be out of the interest-free funds generated or available with the company, if the interest-free funds were sufficient to meet the investments. In the instant case it is not in dispute that assessee was having her own interest free funds of ₹ 1,51,65,341/- which she advanced to her husband and which she is not supposed to charge any interest. The Revenue Authorities wrongly presumed that assessee should have charged interest on the entire amount of loan given to the husband irrespective of the fact that assessee was having her own interest free funds which was given without interest to her husband. Thus no merit for disallowance / addition to the income of the assessee under the head “Income from Other Sources”. - Decided in favour of assesse
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