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| The Tax Publishers2019 TaxPub(DT) 0651 (Ahd-Trib) INCOME TAX ACT, 1961
Section 36(1)(iii)
As decided by Tribunal in assessee's own case Spectoms Engineering Pvt. Ltd. v. ITO [ITA Nos. 836/Ahd/2012, 06/Ahd/2011, 2627/Ahd/2012 & 562/Ahd/2014, dt. 27-11-2017], addition made by lower authorities on account of interest on the diversion of interest bearing funds to interest free loans and advances was liable to be deleted.
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Business deduction under section 36(1)(iii) - Interest free loan given to sister concern whether out of commercial expediency - Allowability -
Assessee-company was engaged in the business of Project Engineers & Manufacturers for Cattle Feed, Poultry Feed Equipments and Storage systems. Assessee had advanced loans to the firms, in which Directors were partners. He had not charged any interest on the amount/loan advanced to sister concerns. AO also observed that the disallowance of interest was made by his predecessor. Thus, the amount of interest was disallowed and added to the total income of assessee. Held: As decided by Tribunal in assessee's own case Spectoms Engineering Pvt. Ltd. v. ITO [ITA Nos. 836/Ahd/2012, 06/Ahd/2011, 2627/Ahd/2012 & 562/Ahd/2014, dt. 27-11-2017], addition made by lower authorities on account of interest on the diversion of interest bearing funds to interest free loans and advances was liable to be deleted.
Followed:Spectoms Engineering Pvt. Ltd. v. ITO [ITA Nos. 836/Ahd/2012, 06/Ahd/2011, 2627/Ahd/2012 & 562/Ahd/2014, dt. 27-11-2017]
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
INCOME TAX ACT, 1961
Section 72
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