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2013 (5) TMI 77 - ITAT AHMEDABADDisallowance of interest attributable to interest free loan provided - Held that:- As per Bombay High Court decision in the case of Reliance Utility Power Ltd (2009 (1) TMI 4 - HIGH COURT BOMBAY ),it was held that if there be interest-free funds available to an assessee sufficient to meet its investment and at the same time the assessee had raised the loan, it can be presumed that the investments were from the interest-free funds available - The High Court observed that presumption would arise in case of interest free fund available with investment would be out of interest free fund was available with the company Appellant has given Rs. 1.72 crore as advance interest free and not charged interest on it, the AO had not established the nexus between the interest borrowing fund utilized for interest free advances in the assessment order - If the interest free funds were sufficient to meet the investment in this case also the interest free funds are available and the Bombay High Court proposition in above case is squarely applicable in the case of interest free advances - Thus we allow the appeal of the assessee
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