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TMI Blog2014 (11) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... ht in law in disallowing the interest payment of Rs. 7,08,742/- for the assessment year 2004 -05 and Rs. 6,56,783/- for the assessment year 2005-06" ii) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in disallowing the interest payment when the interest free advances given to sister concern is out of own funds and out of commercial expediency" iii) In any event, whether on the facts and in the circumstances of the case, the Tribunal was right in law in disallowing the interest payment of Rs. 6 lakhs which represents interest paid on Fixed Loan of Rs. 50.00 lakhs received from M/s.T.N.K.Govindaraju chetty a firm in earlier years and which has no relation to subsequent interest free advances?" 2. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income Tax (Appeals), who after relying upon various decisions, directed the Assessing Officer to delete the addition made, thereby allowed the claim made by the assessee. 4. Aggrieved by the order of the Commissioner of Income Tax (Appeals), the Revenue preferred appeals before the Income Tax Appellate Tribunal. The Tribunal, agreed with the view of the Revenue, allowed the appeals filed by the Revenue holding that the advancement of non-interest bearing funds to related parties was not compelled by any commercial expediency and the assessee had not proved any commercial expediency. 5. Aggrieved by the order of the Income Tax Appellate Tribunal, the assessee is before this Court. 6. Heard learned counsel appearing for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has also not proved before us any commercial expediency in regard to any of the interest-free advances given to the related parties. The claim of the assessee that it had adequate non-interest bearing funds to give the interest-free advances is seen otherwise insofar as the non-interest bearing funds available with the assessee is in the form of profits of the year which obviously cannot be determined until the end of the year. Even assuming that these funds were available, it would have to be seen in line with the cash book of the assessee. Here it would be pertinent to note that the resolution to advance the amounts to one of the concerns, namely M/s.Glenrock Estates P. Ltd. to an extent of Rs. 250 lakhs was held on 22.04.2002, i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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