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Section 36(1)(iii) Disallowance Deleted Where Funds Were Sufficient
Case Law Details
- Case Name
- Ashapura Developers Vs ACIT (ITAT Mumbai)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2014-15
- Courts
- All ITAT, ITAT Mumbai
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Ashapura Developers Vs ACIT (ITAT Mumbai)
Section 36(1)(iii) Disallowance Deleted in Full — No Presumption of Diversion Where Interest-Free Funds Are Ample
The Mumbai Bench of the ITAT allowed the appeal of Ashapura Developers for AY 2014-15, deleting the residual disallowance of ₹7.70 lakh under section 36(1)(iii) that had been sustained by the CIT(A).
During scrutiny, the AO had made multiple additions, including disallowance of interest on the ground that the assessee diverted borrowed funds to interest-free advances. While the CIT(A) deleted the entire addition under section 68 and mos...
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