No Interest Disallowance Without Nexus Between Borrowed Funds & Non-Business Advances: ITAT Lucknow

Jaiswal Rice Mill Vs ITO (ITAT Lucknow) The Income Tax Appellate Tribunal (ITAT), Lucknow Bench, partly allowed the assessee’s appeal and restored the issue relating to the disallowance of interest expenses amounting to Rs. 6,00,000 to the file of the Assessing Officer (AO) for fresh examination. The Tribunal held that the matter required reconsideration as there was no material on record establishing that interest-bearing funds had been diverted for non-business purposes, and the basis for adopting an interest rate of 12% was not adequately explained. The assessee had challenged the app...