Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2024 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (3) TMI 539 - ITAT DELHIAddition of interest expenses on the loan taken from various parties - sufficiency of own funds to lend advance free loans or not? - loans received have been used for income earning purpose - AO observed that the assessee has advanced large amount of loans to its firm and his related concern, thus since the loans received on which the interest paid was utilized for advancing loans for which no interest has been received, the total interest paid has been disallowed - as per CIT(A) disallowance has to be worked out by taking the ratio of average interest bearing funds and the average total funds - HELD THAT:- The assessee has returned income Rs. 4.58 Cr. and had a capital of Rs. 25.69 Cr. and is also on fact that Rs. 7.96 Cr. has been invested in the partnership firm on which the assessee has earned income which has been duly offered to tax. Capital account of the assessee in the books of M/s B. K. Sales Corporation have been examined. After examination and verification, it is observed that the assessee had sufficient own funds to lend advance free loans and the loans received have been used for income earning purpose and such income earned has been offered to tax. Hence, we hold that no disallowance on account of interest is called for. Appeal of assessee allowed.
|