Interest disallowance not justified if commercial expediency exists in giving interest free advances

ACIT Vs T Bhimjyani Realty Private Ltd. (ITAT Mumbai) ITAT Mumbai held that disallowance of interest expenditure attributable to interest-free advances not justified since sufficient interest free funds available and also there existed commercial expediency in giving interest free advances. Accordingly, appeal of revenue dismissed. Facts- The assessee is a Private Limited Company and engaged in the real estate business of developing residential project. During the course of assessment proceedings, the AO noticed that the assessee has borrowed interest bearing loans and was paying interest ther...