Interest free advance given to farmers out of business expediency justified: ITAT Agra

Girraj Cold Storage Pvt. Ltd. Vs ITO (ITAT Agra) ITAT Agra held that addition towards interest paid on CC is liable to be deleted since interest free advance given to potato growers (farmers) were out of the business expediency. Accordingly, addition deleted and appeal allowed. Facts- During reassessment proceedings, AO observed that the assessee has given interest free advances to the potato growers during the year under consideration of Rs.1,70,04,076/- ,whereas it has raised interest bearing loans from the bank and interest paid on such loan has been debited in the profit and loss account. ...