Interest-free loan to sister concern- Sufficient own funds-No Disllowance can be made

Yogendra Khandelwal Vs ACIT (ITAT Jaipur)

Undisputedly, interest-free funds available with assessee were far in excess of amount advanced to sister concern and a presumption would arise in favour of the assessee that interest-free funds had been utilized for advancing interest free loan to the sister cocnern, therefore, disallowance of deduction under section 36(1)(iii) was not justified.

FULL TEXT OF THE ITAT JUDGMENT

These are cross appeals filed by the assessee and the revenue against the order of ld. CIT (A)-1, Jaipur dated 21.09.2012 for A.Y. 2009-10 wherein the respective grounds of the appeal are as under:-

Assessee’s grounds of appeal (ITA No. 906/JP/12)

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