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| The Tax Publishers2020 TaxPub(DT) 2246 (Coch-Trib) : (2020) 183 ITD 0001 INCOME TAX ACT, 1961
Section 36(1)(iii)
Where assessee led no evidence to show commercial expediency to advance funds to sister cocnerns exept the oral plea, AO was justified to make proportinate disallowance of deduction claimed under sec.36(1)(iii).
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Business deduction under section 36(1)(iii) - Interest on borrowed capital - Advancement of interest free loan to sister concern - Assessee pleading to have made advance on account of commercial expediency out of sufficient own funds--No cogent evidence filed by assessee
Assessee claimed deduction under section 36(1)(iii). AO disallowed assessee's claim proportionately on the ground of assessee having advanced intrest free loan to sister concern. Assessee contended that advance was given on account of commercial expediency out of sufficient own funds available with assessee.Held: Though assessee made an oral plea that money had been advanced to sister concerns on account of commercial expediency however, Assessee led no evidnece to show commercial expediency to advance funds to sister cocnerns. Further, assessee failed to file cash flow statement to show that own fudns were advanced to the sister concerns. Accordingly, disallowance made by AO was justified.
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2005-06
IN THE ITAT, COCHIN BENCH
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