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2020 (10) TMI 408 - AT - Income TaxDisallowance of interest in respect of interest free advances given to related concerns - loans and advances to relatives have decreased during the year - appellant has not charged any interest on the loans and advances as the appellant has sufficient interest free capital and trade creditors for making the interest free advance to the above parties - Whether A.O. has not established the direct nexus between interest bearing loan taken and interest free loan given? - HELD THAT:- As fund flow statement will reflect such a position of interest free funds which are available to be utilized and which the assessee has failed to furnish during the appellate proceedings before him. Even during the course of present proceedings, the assessee has not furnished any fund flow statement and therefore, the said findings of the CIT(A) remain uncontroverted and we are thus not inclined to interfere with the same and thus, the contentions so advanced by the ld AR cannot be accepted as the same remain unsubstantiated. Regarding the contention of the AR that other advances to related concerns are in nature of trade debtors and the matter has not been examined by the AO, the matter is set-aside to the file of the AO with a direction to verify the said claim and where, on verification, it is found that such transactions are in course of the assessee’s business, the same is directed to be excluded while working out the disallowance of interest.
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