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| The Tax Publishers2020 TaxPub(DT) 2379 (Del-Trib) INCOME TAX ACT, 1961
Section 36(1)(iii)
Where assessee claimed to have advanced interest-free loan to sister concern out of sufficient interest-free own funds available with when, Considering totality of facts of case and in the interest of justice, issue was restored to AO with direction to give one more opportunity to assessee to substantiate his case.
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Business deduction under section 36(1)(iii) - Interest on borrowed capital - Advancement of interest-free loan - Assessee pleading sufficient own funds and commercial expediency
Assessee claimed deduction under section 36(1)(iii). AO disallowed assessee's claim proportionately on the ground of assessee having advanced interest-free loans to certain persons. Assessee pleaded that advances were made out of non-interest bearing funds and that too on account of commercial expediency. Held: Assessee had not submitted any reconciliation to show that concerned advances were made out of non-interest bearing funds. Assessee also could not substantiate trade dealings with persons to whom such interest free advances were given. Considering totality of facts of case and in the interest of justice, issue was restored to AO with direction to give one more opportunity to assessee to substantiate his case.
REFERRED :
FAVOUR : Matter remanded.
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 143(3)
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