TMI Blog2022 (1) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... ratio of decision in CIT Vs. Hotel Savera [ 1997 (11) TMI 37 - MADRAS HIGH COURT] is applicable to the facts of the case wherein it was held that in case own funds and borrowed funds were inextricably mixed up in such a way that it was impossible to delineate which funds were advanced to group concern, no interference could be made in the Tribunal's finding that no disallowance u/s. 36(1)(iii) would be called for. Deriving strength from these decisions, we delete the impugned disallowance as sustained by learned first appellate authority. - Decided in favour of assessee. - ITA No. 2530/Chny/2019 - - - Dated:- 17-1-2022 - V. Durga Rao, Member (J) And Manoj Kumar Aggarwal, Member (A) For the Appellant : B. Ramakrishna, CA - Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es on Overdraft Limit. It was also noted that the assessee advanced interest free loan of ₹ 1233.30 Lacs to two entities i.e. M/s. Navin Housing Properties Private Ltd. and M/s. Entrayan Educational Technology Private Ltd. The assessee was stated to be shareholder and director in these two entities. On the basis of these facts, Ld. AO proceeded to compute interest disallowance u/s. 36(1)(iii). The assessee, inter-alia, submitted that the loans were given out of own funds. However, considering the fact that the assessee had mixed funds, Ld. AO disallowed expenditure of ₹ 11.63 Lacs in its entirety. 5. During appellate proceedings, the assessee submitted that it had two overdraft accounts with State Bank of Travancore against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of more than ₹ 5 Crore as on 31.03.2016. The assessee is also having interest free advances received from flat buyers which are more than ₹ 40.15 Crores. The loans of ₹ 7.92 Crores on which interest has been paid by the assessee is secured loan in the shape of bank overdraft. The assessee is also having unsecured loans of more than ₹ 12.77 Crores. On asset side, the assessee has closing work-in-progress for ₹ 30.14 Crores and the assessee has advanced sum of ₹ 10.05 Crores to landowners. The deposits are to the tune of ₹ 9.21 Crores whereas interest free loans and advances to group concerns amount to ₹ 12.33 Crores. Thus, it could be seen that the assessee has used mix of funds. Nevertheless ..... X X X X Extracts X X X X X X X X Extracts X X X X
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