No disallowance for Advances given if Assessee have sufficient Interest Free Funds

PCIT Vs B.T. Patil & Sons Belgaum Construction P Ltd (Bombay High Court) The issue under consideration is whether the Tribunal is correct in disallowing the deduction of interest expenditure on the ground that the assessee had diverted interest bearing funds for non-business purposes? In the present case, The assessee had outstanding balance shown in the ledger accounts of the piece workers which remained unchanged through out the year. According to the Assessing Officer, this would show that no work was carried out by these parties. The assessee had shown to have advanced sizable amount ...