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2020 (2) TMI 1099 - HC - Income TaxDisallowance of interest u/s 36 (1) (iii) - assessee had obtained interest bearing loans which had in turn been advanced to sister concerns and other associates without charging interest - ITAT allowed the appeal of the assessee, rejecting the disallowance made by the AO - HELD THAT:- This Court in Commissioner of Income Tax v DD industries [2015 (3) TMI 895 - DELHI HIGH COURT] observed that where adequate funds were available during the assessment years and, since in the past the Revenue had accepted the assessee’s plea in this regard and not brought the amounts to tax under Section 36 (1)(iii), the Revenue could not have taken a different view for three years in question, particularly, without any conclusion that, in fact, general reserves, surpluses and other funds were not available. Reference may also be made to the decision of this Court in Commissioner of Income Tax v Tin Box Co. [2002 (11) TMI 75 - DELHI HIGH COURT] wherein it was held that the finding of the Tribunal that the Department had not been able to controvert or disprove the fact that the assessee had substantial capital and interest-free funds available with it, not only in the preceding years but also in the years under consideration, which far exceeded the interest-free advances to the sister concern, is not without any evidence or material and therefore, disallowance of interest was deleted. Therefore, as already noted, in the present case, it is clear that there were sufficient interest free funds available with the assessee, allowing them to advance the loans in question. Thus, the Tribunal, in our view was correct in concluding that it could not be said that it was the interest-bearing loan obtained from Bank of Baroda and Andhra Bank which had been advanced as interest-free loan to M/s Gaursons India Ltd. No substantial question of law arises. We therefore find no infirmity in the impugned order passed by the Tribunal. No substantial question of law arises for our consideration
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