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2020 (5) TMI 453 - AT - Income TaxDisallowing proportionate expenses of interest - HELD THAT:- Tribunal in immediately preceding year has considered this issue and even the CIT(A) while confirming the disallowance has relied on order in assessment year 2010-11, i.e. immediately preceding year. We also noted that no disallowance of interest expense has been made in the earlier years with regard to opening balance of said borrowings and utilisation thereof. As noted that in this year also the position does not change and assessee is having sufficient own funds in the form of current year’s profit before depreciation. Even otherwise, assessee also contended that assessee had at its disposal corresponding interest free advances received from various parties mainly comprising of share application money amounting to ₹ 18.80 crores in aggregate, which exceeds the above interest free advances made by assessee. In terms of the above facts of the present case and the precedent in the immediately preceding year, no disallowance is to be made, as made by CIT(A) on the opening balance qua their utilisation, in earlier year. Hence, we delete the proportionate disallowance of interest expense and allow the appeal of assessee. - Appeal of assessee is allowed.
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