TMI Blog2023 (7) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... ition made towards disallowance of interest - Decided in favour of assessee. - I.T.A. No. 43/Viz/2023 And 44/Viz/2023 - - - Dated:- 14-7-2023 - Shri Duvvuru Rl Reddy, Hon ble Judicial Member For the Appellant : Shri G.V.N.Hari, AR For the Respondent : Shri ON Hari Prasada Rao, DR ORDER PER SHRI DUVVURU RL REDDY, JUDICIAL MEMBER : These appeals are filed by the assessee against the orders of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in DIN Order No. ITBA/NFAC/S/250/2022-23/1048130950(1) and ITBA/NFAC/S/250/2022-23/1048134377(1) dated 21.12.2022, arising out of the assessment orders passed by the Assessing Officer (AO) u/s 143(3) of the Income Tax Act, 1961 (in short A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was asked to file it s objection for disallowance of interest claim of Rs. 27,66,685/- for not charging interest on the advances paid to the above three persons. The assessee replied that despite of best efforts, the company was unable to recover the advances and no provision for interest was made in the books, in order to charge the same at the time of payment of principal. Not being statisfied with the reply given by the assessee, the AO held that the funds / profits transferred / utilized by company to others with whom it had no business dealings and on such transfers no interest was also charged, whereas, it has paid interest of Rs. 27,66,685/- on the borrowed funds and if the funds are realised, there is no necessity to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advanced Rs. 2,50,00,000/- each to K.Swapna, K.Harika and K.Sravanthi., daughters of the director of the assessee company. The Ld.AR further submtited that the asssessee availed credit facility of Rs. 1,70,00,000/- from SBI in the F.Y.2007-08, which is renewed every year and the loan amount was utilized for the business on which the assessee company paid interest. Hence, there is no nexus between the loan funds and the interest free advances. Thus, it is evident that the advances are not given from interest bearing funds, therefore, pleaded that the interest paid cannot be disallowed. The assessee relied on the decision of Hon ble ITAT in the case of ACIT Vs. Rohit Kochar in ITA No.3338/Del/2016 dated 30.11.2018 and pleaded to set aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s between the loan funds and the interest free advances as the loan was sanctioned much earlier than the transaction of giving advances to the three persons. Now, the onus is on the revenue to establish that there is nexus between the interest bearing funds and interest free advances, but, the revenue failed to establish the same. The assessee relied on the decision of Hon ble ITAT in the case of ACIT Vs. Rohit Kochar in I.T.A. No.3358/Del/2016 dated 30.11.2018 and submitted that on similar set of facts, the case was adjudicated in favour of the assessee. For the sake of clarity and convenience, relevant part of the order of the Tribunal is extracted as under : that there is factual finding given by the CIT(A) that as regards the inter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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