Thursday, 30 May 2013

No disallowance in respect of interest on interest-free advances if there are sufficient funds to make such interest-free advances:


AO made addition in respect of interest on advances made by assessee-company to certain concerns in which Directors of the company were interested. CIT(A) and Hon’ble ITAT deleted the said addition as they found that the assessee-company had sufficient funds to make interest-free advances and borrowed funds were not directed for making interest free advances.On Revenue’s appeal, the Hon’ble High Court concurred the view of the lower appellate authorities and dismissed the Revenue’s appeal.

[NAVAL TECHNOPLAST INDUSTRIES LTD. - TAX APPEAL NO.1416 & 1417 of 2011 - GHC]

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