Interest on Interest free loan given for business purpose cannot be disallowed – ITAT Mumbai

Essar Investments Limited vs. DCIT (ITAT Mumbai) – On the identical facts the Tribunal in the assessee’s own case for the assessment years 1998-1999, 1999-2000 & 2000-2002 vide para 23 of the order dated 9.7.2008 has held that the assessee had advanced the loans to the group concerns for its business purpose, in such a case, interest on such advances cannot be disallowed. The similar view has been followed by the Tribunal in the assessee’s own case in ITA No. 5083 & 5642/M/2007 for AYs 2000-2001 & 2003-2004 dated 11.12.2009

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