Interest Expenditure Allowed Due to Sufficient Interest-Free Funds, Revenue's Appeal Dismissed.

Disallowance of interest expenses incurred for non-business purposes - The ITAT found that the interest expenditure claimed by the assessee was allowable due to the presence of significant interest-free funds available to cover interest-free advances. - Citing Commissioner of Income Tax V/s. Reliance Utilities & Power Ltd., the ITAT established that when interest-free and interest-bearing funds are available, a presumption arises that investments are made from interest-free funds if they are sufficient to cover such investments. - The High Court dismissed the appeal of the Revenue, finding no merit in it. .....

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