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2016 (9) TMI 116 - PUNJAB & HARYANA HIGH COURTDisallowance of deduction under Section 33(1)(iii) in relation to interest paid by the assessee - ITAT deleted the addition - Held that:- A perusal of the balance-sheet showed that the capital of the assessee included the profit earned during the year and that, therefore, both the closing capital and the profit earned during the year could not be considered as being available separately for advancing the interest free loans. Even assuming that to be so, it would make no difference. This is for the reason that even otherwise the assessee had sufficient amounts available to him to advance the interest free loan of Rs. 7.37 crores. As mentioned earlier, the assessee had available with him Rs. 11.78 crores on account of capital itself. Moreover, he also had an interest free loan of Rs. 1.18 crores from his wife. The CIT (Appeals) also observed that the assessee had not rebutted the Assessing Officer’s contention that he had also made investment out of his capital during the year which exceeded the capital of the assessee. However, Mr. Katoch was unable to invite our attention to any part of the record which established this assertion. He merely relied upon the observation. Further, the nature of this investment is also not indicated. Nor is there anything to indicate that such investment was made out of the capital. There is no co-relation of the investment made and the interest bearing loan and the capital available to the assessee. In these circumstances, the Tribunal’s appreciation of the facts to the contrary cannot be held to be absurd or perverse.
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