TMI Blog2015 (5) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... erest bearing loan for any other purpose except for the purpose of the business. - Decided in favour of assessee - ITA No. 1566/PN/2013 - - - Dated:- 22-5-2015 - Shri R.K. Panda, Accountant Member and Shri Vikas Awasthy, Judicial Member For the Applicant: Shri Dharmesh Shah For the Respondent: Shri B.C. Malakar ORDER PER R.K. PANDA, AM : This appeal filed by the Revenue is directed against the order dated 20-05-2013 of the CIT (A) Central, Pune relating to Assessment Year 2007-08. 2. The revenue in its only ground has challenged the order of the CIT(A) in deleting the addition of ₹ 27,90,697/- made by the Assessing Officer on account of interest attributable to interest free loans given. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st free funds and interest free advances is not substantiated. On being asked by the Assessing Officer to give a detailed working of interest attributable to interest free advances, the assessee filed without prejudice a detailed workings based on products method as per the working for the immediately preceding assessment year. As per such working filed by the assessee the interest attributable to interest free loans and advances out of interest bearing loans amounted to ₹ 27,90,697/-. The Assessing Officer accordingly made addition of ₹ 27,90,697/- being interest attributable to interest free loans given. 5. Before CIT(A) the assessee submitted that as against the aggregate funds of ₹ 138,91,44,536/- the interest f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and the appeal filed by the Revenue has been dismissed by observing as under : 8. We have carefully considered the rival contentions and perused the material available on record. The main dispute is disallowance of interest on the ground that the assessee has given interest free loans out of interest bearing funds. From the material placed on records, it is seen that the assessee has given interest free loan to various persons as on 31st March 2006 at ₹ 9,39,79,832. The availability of various interest free loans and funds have also been provided which goes to show that at the year end such interest free loans were at ₹ 29,76,48,648. Besides this, the assessee had current year's profit of more than ₹ 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 36(1)(iii). Such a claim of deduction cannot be disallowed, unless it has been shown that the assessee has actually diverted its interest bearing loan either for some non-business purpose of for personal use. There is no diversion of interest bearing loan for any other purpose except for the purpose of the business. Hence, the claim of the assessee under section 36(1)(iii) cannot be disallowed. Thus, the finding and the conclusion drawn by the learned Commissioner (Appeals) appears to be factually and legally correct and we decline to interfere in the matter as such. Thus, the ground raised by the Revenue is dismissed. 10.1 Facts being similar, therefore, respectfully following the decision of the Tribunal in asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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