TMI Blog2023 (2) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... s subsidiaries out of its own fund and borrowed funds were utilized for acquiring capital assets. It is not in dispute that the interest free funds available to the assessee were sufficient to meet its investment and thus, it could be presumed that the investments were made from the interest free funds available with the assessee. Our view is duly fortified by Reliance Industries Ltd. [ 2019 (1) TMI 757 - SUPREME COURT] , wherein, similar findings of the Tribunal were duly affirmed by the higher Courts. Under the above facts and circumstances, the addition made towards disallowance of interest stands deleted. Appeal filed by the assessee is allowed. - I.T.A. No. 3083/Chny/2019 - - - Dated:- 15-2-2023 - Shri V. Durga Rao, Judicial Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e debit balance of ₹.50,01,777/- was also not eligible under section 36(1)(iii) of the Act as the same was not incurred for the purpose of business. Further, the amount was also not eligible to be deducted under section 37 of the Act as the same was not laid out or expended wholly or exclusively for the purpose of business. The Assessing Officer further observed that the said loan was advanced to a group concern without charging any interest and the debit balance in the account of the subsidiary company was also in the nature of interest free loan. Since the assessee has paid interest at the rate of 14% on the loans availed from banks, the Assessing Officer determined the interest expenses at the rate of 14% on the interest free loans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reproduced as under: 8. Per contra the AR countered the AO s reasonings as under: ............ The appellant has not utilized the borrowed funds for making strategic investment or advancing any money to the group companies. During the F.Y. 2005-06 the appellant had invested in M/s. Oyster Medisafe Limited as a strategic investment. However shares were issued only to the extent of ₹.66.31 lakhs and balance amount of ₹.79.63 lakhs being converted into unsecured loan by M/s. Oyster Medisafe Limited. Therefore the investment was made prior to obtaining the loan from banks. The appellant subsequently found that the transaction was not viable and hence withdrew the investments in the subsequent year. In respect of the inv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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