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TMI Blog2021 (3) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... neither the assessee nor its authorized representative appeared before the Bench on the above dates. As there is non-compliance by the assessee, we are proceeding to dispose off this appeal after examining the materials available on record and after hearing the Ld. Departmental Representative (DR). 2. The grounds of appeal filed by the assessee read as under: 1(a) The Ld. CIT(A) erred in confirming the disallowance of interest expenses of Rs. 3,52,251/- u/s. 36(1)(iii) of the I.T. Act stating that the interest bearing funds were utilized for non-business purposes, i.e. investment in mutual funds. (b) The Ld. CIT(A) erred in confirming the disallowance of interest u/s. 36(1)(iii) of the Act without appreciating that the appellant has su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction of interest of loan raised for business purposes. Once the appellant claimed any such deduction in the books of account, the onus will be on the appellant to satisfy the Assessing Officer that whatever loans were raised by the appellant were used for business purposes. If in the process of examination of genuineness of such a deduction, it transpires that the appellant had utilized certain funds for investment for short period or for any other than business purpose, there would be a very heavy onus on the appellant to discharge before the Assessing Officer to the effect that in spite of pending term loans and working capital loans on which the appellant is incurring liability to pay interest, there was justification for investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) that "the investment in mutual funds are made out of its own funds and interest-free advances". The Hon'ble Bombay High Court in the case of CIT v. Reliance Utilities & Power Ltd. (2009) 178 Taxman 135 (Bom) has held in the context of section 36(1)(iii) of the Act that "if there is interest-free funds available to an assessee sufficient to meet its investment and at the same time the assessee had raised a loan it can be presumed that the investments were from the interest-free funds available". The above ratio laid down by the Hon'ble Jurisdictional High Court is to be examined in the instant case. Therefore, we set aside the order of the Ld. CIT(A) on the above issue and restore the matter to the file of the AO to examine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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