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2017 (7) TMI 206 - AT - Income TaxDisallowance of interest -as per AO loans have been utilized for the purpose of acquisition of capital assets - Held that:- AO aforesaid conclusion is not supported by any evidence on record. We find that while upholding the order of AO, though Ld. CIT(A) has stated that though the cash credit loan account was not used for the purpose of acquisition of capital assets but since as per the ledger, the cash credit funds were utilized for the repayment of funds availed for work in progress, the expenditure was not allowable. CIT(A) though has disallowed the interest but has given a finding that the amount borrowed from cash credit account was not utilized for acquisition of capital assets. No evidence has been brought on record by Revenue to demonstrate that the general purpose loan or term loan which was for take-over of loan from Bank of Maharashtra was utilized for acquisition of capital assets. In such a situation, we are of the view that no disallowance of interest is called for merely on the basis of presumption. We therefore direct the deletion of disallowance of interest made by the AO. - Decided in favour of assessee.
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