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| The Tax Publishers2019 TaxPub(DT) 0658 (Bom-HC) INCOME TAX ACT, 1961
Section 36(1)(iii)
Where interest-free loan to sister concern was given out of non-interest bearing own funds, no disallowance of deduction under section 36(1)(iii) was called for.
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Business deduction under section 36(1)(iii) - Interest on borrowed capital - Advancement of interest-free loan to sister concern - Sufficient own funds
Assessee claimed deduction under section 36(1)(iii). AO disallowed assessee's claim proportionately on the ground of assessee having advanced interest free loan to sister concern.Held: As evident, therefore, it could be presumed that loan to sister concern was given out of non-interest bearing own funds and, therefore, no disallowance of deduction under section 36(1)(iii) was called for.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2003-04 & 2006-07
INCOME TAX ACT, 1961
Section 32, Expln. 5
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