Disallowance u/s 36(1)(iii) unsustainable as advance given during normal course of business

ACIT Vs Hotel Ishika (ITAT Raipur) ITAT Raipur held that the interest expenditure corresponding to the advances that was given in the normal course of business could not have been disallowed under section 36(1)(iii) of the Income Tax Act. Facts- Post completion of original assessment, as is discernible from record, the A.O on the basis of further verifications carried out after culmination of the original assessment, had observed, that the assessee firm had diverted its interest bearing funds for advancing interest free loans to certain concerns. The A.O holding a conviction that proportionate...