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TMI Blog2021 (7) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... nd direct the A.O. to delete the disallowance. - ITA No.2032/Bang/2019 (Assessment Year : 2015-16) - - - Dated:- 28-6-2021 - SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER Appellant by : Shri Sharath Rao, A.R. Respondent by : Shri Kannan Narayanan, D.R. ORDER PER B.R. BASKARAN, ACCOUNTANT MEMBER: The Assessee has filed this appeal challenging the order dated 16.7.2019 passed by Ld. CIT(A)-7, Bengaluru and it relates to the assessment year 2015-16. The assessee is aggrieved with the decision of Ld CIT(A) in confirming the disallowance on interest expenditure of ₹ 54,32,211/- made by the A.O. 2. The facts relating to the issue are stated in brief. During the course of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of loan. Hence no disallowance of interest is called for, since the presumption is that the assessee has used its own funds for making investment and giving loan. In this regard, the ld A.R invited our attention to the Balance Sheet placed in the paper book. We notice from the Balance Sheet that the interest free funds available with the assessee as at the beginning and end of the year was ₹ 9.78 crores and ₹ 10.02 crores respectively. The aggregate amount of investment made and interest free loan given by the assessee was ₹ 5.71 crores. Admittedly, own funds available with the assessee is in excess of value of investment and loan given interest free. 4. The Ld. A.R. invited our attention to the decision rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 28-5-2012 of the Tribunal for the prior assessment year has been reproduced. 33. We do not see how when the Assessing Officer's views are that in cases of the interest free loans and interest given by the assessee to its subsidiary companies are in the above sums, still, the principle laid down by this Court that if there are funds available to them interest free and overdraft or loans taken, would not apply. This view of the Assessing Officer is ex facie contrary to the settled principle that a presumption would arise that the investment would be out of the interest free funds generated or available with the company. Then, the borrowed capital in hand in that case and interest expenditure was deductible under Section 36(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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