TMI Blog2021 (1) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... No.1 is accordingly dismissed. Disallowance of interest u/s. 36 (1) (iii) - AO noticed that the assessee has given interest free advances to its sister concern and interest incurred by the assessee on the loans borrowed by it need to be proportionately disallowed - HELD THAT:- On the first day of the accounting year the loans and advances were ₹ 15.70 crores and in the last day of the accounting year loans and advances have been reduced to ₹ 9.55 crores. This means that no fresh loans / advances were given during the year under consideration. Further the interest free funds available with the assessee is around ₹ 38 crores, therefore, it can be safely concluded that the loans and advances given to the sister concern h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end income is incidental. 6. After considering the facts and the submissions the CIT(A) was of the opinion that the disallowance made by the AO is excess and drawing support from the decision of Hon ble Delhi High Court in the case of Joint Investment Private Limited 2015, 3 TMI 155 restricted the disallowance to the extent of the exempt income amounting to ₹ 364690/-. 7. Before us the counsel for the assessee vehemently stated that no satisfaction was recorded by the AO before invoking the provisions of section 14A of the Act. The counsel further drew our attention to the decision of the Tribunal in assesee s own case for earlier assessment year and pointed out that the Tribunal has, on identical set of facts, deleted the disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier assessment year has deleted the addition. 13. We have carefully considered the orders of the authorities below. Facts emanating from the assessment order show that on the first day of the accounting year the loans and advances were ₹ 15.70 crores and in the last day of the accounting year loans and advances have been reduced to ₹ 9.55 crores. This means that no fresh loans / advances were given during the year under consideration. Further the interest free funds available with the assessee is around ₹ 38 crores, therefore, it can be safely concluded that the loans and advances given to the sister concern have been given out of own interest free funds. On these facts no disallowance need to be made, we accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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