Disallowance towards investment made out of interest free own funds unjustified

Living Media India ltd Vs ACIT (ITAT Delhi) ITAT Delhi held that disallowance u/s 37(1) of the Income Tax Act towards investment made out of interest free own funds available with the assessee is unjustifiable and hence deleted. Facts- The issue involved here is that AO has made a disallowance of Rs. 78,20,000/- u/s. 37(1) of the Act observing that during the year under consideration the assessee company has incurred interest expenses @ 3.4% on the funds borrowed whereas the loans and advances to related parties are interest free. It concluded the proportionate finance cost attributable to the...