TMI Blog2016 (9) TMI 1606X X X X Extracts X X X X X X X X Extracts X X X X ..... to meet the investment. We are of the view that the judgment in the case of CIT Vs. Reliance Utilities Power Ltd. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] is applicable in the facts of the present case. Accordingly, following the judgment of Hon'ble Bombay High Court (supra), addition made by the Assessing Officer in question is deleted. Appeal of the assessee is allowed. - I.T.A. No.100/Bang/2014 - - - Dated:- 16-9-2016 - SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER For the Appellant : Shri Narendra Sharma, Advoacate. For the Respondent : Shri Nambi Rajaa Pillai, JCIT (D.R) ORDER Per Shri Vijay Pal Rao, J.M. : This appeal by the assessee is directed against the order dt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r advancing the loan to the Directors. The assessee has given the details that its own interest free fund is more than ₹ 10 Crores and therefore no interest can be disallowed for advancing of loan amounting to ₹ 1,58,64,874 to the Directors. The CIT (Appeals) did not accept the contention of the assessee. 3. Before us, the ld. AR of the assessee has reiterated the contention that the assessee's own fund is sufficient to advance the amount in question to the Directors. He has referred the Balance Sheet and submitted that the assessee's own fund is ₹ 10.35 Crores whereas the advances given to the Directors are at ₹ 81.58 Crores. Therefore the assessee's own interest free fund is more than sufficient to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Share Application Money 8,00,000 3. Reserves Sruplus 9,60,32,194 Total 10,35,12,194. This factual position has not been disputed by the authorities below that the assessee's own fund is ₹ 10.35 Crores. An identical issue was fell for consideration of Hon'ble Bombay High Court in the case of CIT Vs. Reliance Utilities Power Ltd. (supra) wherein the revenue has filed the appeal against the order of the Tribunal and raised the contention as recorded in para 6 of the judgment. After considering the contention of the revenue that the own fund has been utilized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest-free funds really cannot be faulted. 10. If there be interest-free funds available to an assessee sufficient to meet its investments 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. In our opinion the Supreme Court in East India Pharmaceutical Works Ltd. (supra) had the occasion to consider the decision of the Calcutta High Court in Woolcombers of India Ltd. (supra) where a similar issue had arisen. Before the Supreme Court it was argued that it should have been presumed that in essence and true character the taxes were paid out of the profits of the relevant year and not out of the overdraft account for the running of the business and in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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