Case Law Details
Shri Dharam Pal Aggarwal Vs ACIT (ITAT Chandigarh)
In the present case it is noticed that the Assessing Officer himself admitted that on the loans and advances given by the assessee out of the borrowed funds by using the OD facility the interest was earned, he therefore allowed the interest expenditure to the extent of Rs. 7,17,875/-.
As regards to the other interest free advances, the bank statement of the assessee placed at page no. 16 of the assessee’s compilation reveals that the capital of the assessee as on 31.3.2012 was at Rs. 3,48,04,747/- and the Assessing Officer pointed out in the assessment order that the assessee had given interest free advances to the family and relatives for a sum of Rs. 2,79,00,000/- which shows that the interest free funds in the form of capital were more than the interest free loans given to the family and relatives. In the present case, no nexus had been established by the Assessing Officer in between the interest free advances and the interest bearing borrowed funds, therefore, the disallowance of Rs. 13,77,730/- made by the Assessing officer out of the interest paid by the assessee and sustained by the Ld.CIT(A) was not justified. Accordingly the same is deleted.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal by the Assessee against the order of the Ld. CIT(A)-4 dt. 23/11/2017.
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