Case Law Details
DCIT Vs Om Land Reality P. Ltd (ITAT Ahmedabad)
ITAT Ahmedabad held that disallowance of interest under section 36(1)(iii) unsustainable as interest bearing funds were not utilized for non-business purpose and interest free advances were made in the course of business.
Facts- Only two issues are the addition made related to advances received from prospective buyers treated as unexplained credits and added to the income of the assessee under section 68 of the Act and of interest paid by the assessee disallowed in terms of provisions of section 36(1)(iii) of the Act. It was pointed out that the ld.CIT(A) had granted substantial relief to the assessee on both the issues, aggrieved by which, the Revenue has come up in appeal before us.
Conclusion- Held that we see no reason to interfere in the order of the ld. CIT(A) who has deleted the disallowance of interest under section 36(1)(iii) of the Act giving factual finding, which have remained uncontroverted by the Revenue before us i.e. Interest bearing funds were not found by the AO to be utilized for non-business purpose and Interest free advances given by the assessee were made in the course of business of the assessee. In view of the above, order of the ld. CIT(A) deleting the addition of interest under section 36(1)(iii) of the Act is upheld.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
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