ITAT Deletes Interest Disallowance as AO Failed to Prove Diversion of Borrowed Funds

ITO Vs Discovery Liquor House (ITAT Delhi) The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the Revenue’s appeal and upheld the order of the Commissioner of Income Tax (Appeals) [CIT(A)], which had deleted additions relating to disallowance of interest expenditure, unexplained cash credits under Section 68, and addition to business income arising from alleged discrepancies in purchase figures for Assessment Year 2022-23. The first issue concerned the disallowance of interest expenditure amounting to Rs. 1,26,30,730. The Assessing Officer had disallowed the entire in...