Interest cannot be disallowed if interest free funds exceed interest bearing funds

Shri Narendra Kumar Khandelwal Prop. M/s Ranjana Textiles Vs ITO (ITAT Jaipur) Interest free funds available: The law is well settled that where assessee is having mixed i.e. interest free/interest bearing funds both, but where the interest free funds are larger than the interest free advances/utilization than there will a presumption that the interest free utilization was made out of the interest free funds (but not out of interest bearing fund) and hence, no interest can be disallowed The only dispute is for disallowance of Rs. 9,24,820/- sustained by the CIT(A) out of the total disallowance...