TMI Blog2013 (2) TMI 754X X X X Extracts X X X X X X X X Extracts X X X X ..... s of interest under Section 36[1](iii) is not permissible. In the instant case, as both the authorities have held concurrently on the basis of material available that sufficient amount of interest-free funds were available with the assessee-respondent and therefore also, there is no justification in interfering with the decision of both these authorities. Resultantly, the question of law proposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y 2005-06 declared total income as NIL after setting off the brought forward losses. In scrutiny assessment, the Assessing Officer had made various additions, one of which was disallowances of ₹ 28,68,776/= on account of interest under Section 36[1](iii) of the Income-tax Act, 1961 { Act for short}. 3. Such disallowances were made by the Assessing Officer on the ground that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r annum, the amount of ₹ 28,68,776/= was disallowed. 4. Aggrieved by such disallowance of interest amount under Section 36[1](iii) of the Act, challenge was made before the CIT[A] by the assessee-respondent. On noticing that in case of a sister-concern of the respondent-company where similar disallowances were made, that the same had been deleted by the CIT[A] vide order dated 30th Novemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of interest-free funds to the tune of ₹ 1.74 Crores, upheld the decision of the CIT[A] of reversing the decision of the Assessing Officer on this count. 6. It is well established proposition that when the Revenue fails to establish any nexus between the borrowed funds and the funds diverted/lent, any denial of allowances of interest under Section 36[1](iii) is not permissible. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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