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2021 (3) TMI 1101 - ITAT MUMBAIDisallowance of interest expenses u/s.36(1)(iii) - interest bearing funds were utilized for non-business purposes, i.e. investment in mutual funds - HELD THAT:- Hon'ble Bombay High Court in the case of CIT v. Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] has held in the context of section 36(1)(iii) of the Act that "if there is interest-free funds available to an assessee sufficient to meet its investment and at the same time the assessee had raised a loan it can be presumed that the investments were from the interest-free funds available". The above ratio laid down by the Hon'ble Jurisdictional High Court is to be examined in the instant case. Therefore, we set aside the order of the Ld. CIT(A) on the above issue and restore the matter to the file of the AO to examine the applicability of the ratio laid down in Reliance Utilities & Power Ltd.(supra). We direct the assessee to file the relevant documents/evidence before the AO. Appeal is allowed for statistical purposes.
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