https://www.taxtmi.com/caselaws?id=311066 The ITAT Bangalore allowed the assessee's appeal regarding disallowance of interest expenditure under section 36(1)(iii) on advances to sister concerns. The AO had disallowed the interest claiming the advances were capital in nature for land purchase and should be capitalized. The ITAT found that since the assessee had sufficient internal cash accruals exceeding the interest-free advances given to the sister concern, the proviso to section 36(1)(iii) was not applicable. Relying on Munjal Sales Corporation v. CIT, the ITAT held that interest-bearing loan funds were not utilized for interest-free advances, thereby deleting the addition and deciding in favor of the assessee. en-us Wed, 17 May 2023 00:00:00 +0530 Tue, 05 Dec 2023 21:03:15 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=311066 The ITAT Bangalore allowed the assessee's appeal regarding disallowance of interest expenditure under section 36(1)(iii) on advances to sister concerns. The AO had disallowed the interest claiming the advances were capital in nature for land purchase and should be capitalized. The ITAT found that since the assessee had sufficient internal cash accruals exceeding the interest-free advances given to the sister concern, the proviso to section 36(1)(iii) was not applicable. Relying on Munjal Sales Corporation v. CIT, the ITAT held that interest-bearing loan funds were not utilized for interest-free advances, thereby deleting the addition and deciding in favor of the assessee. Case-Laws Income Tax Wed, 17 May 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=311066