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| The Tax Publishers2020 TaxPub(DT) 1244 (Del-HC) : (2020) 422 ITR 0123 : (2020) 274 TAXMAN 0512 INCOME TAX ACT, 1961
Section 36(1)(iii)
Since it was clear that there were sufficient interest free funds available with assessee, allowing it to advance loans in question, thus, disallowance of interest under section 36(1)(iii) was not justified.
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Business deduction under section 36(1)(iii) - Allowability of interst on loan advanced to sister concerns - Sufficiency of owned funds -
Issue was as regards disallowance of interest under section 36(1)(iii) as assessee had obtained interest bearing loans which had in turn been advanced to sister concerns and other associates without charging interest. Held: Since revenue was not able to controvert or disprove fact that assessee had substantial capital and interest-free funds available with it, not only in the preceding years but also in years under consideration, which far exceeded interest-free advances to sister concern, was not without any evidence or material and therefore, disallowance of interest was to be deleted.
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
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