ITAT disallows proportionate interest for Interest free advances given to sister concerns

H.I. Tamboli & Co. Vs Asstt. CIT (ITAT Pune)

The issue in the present case is with respect to disallowance of interest on the interest free amounts advanced to sister concern. We find that learned Commissioner (Appeals) while granting partial relief to the assessee has noted that as against the interest free advance of Rs. 1.27 crores to its sister concern M/s. Hira Enterprises, the average balance of partner capital stood at around Rs. 21,00,000 meaning thereby that the assessee did not

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