https://www.taxtmi.com/highlights?id=76300 Disallowance of interest u/s 36(1)(iii) - The AO had disallowed the interest claimed by the assessee on advances made to its Director, citing a lack of nexus between the advances and the business activities of the assessee. The assessee contended that the advances were made for business purposes and out of commercial expediency. - The Appellate Tribunal recognized the importance of establishing a clear nexus between the advances and the business activities of the assessee. It also emphasized the need to verify the availability of interest-free funds with the assessee at the time of advancing the loan. - The ITAT ordered the AO to examine the additional evidence provided by the assessee and provide an opportunity for the assessee to substantiate its case. en-us Wed, 03 Apr 2024 08:48:30 +0530 Wed, 03 Apr 2024 08:48:30 +0530 TaxTMI RSS Generator https://www.taxtmi.com/highlights?id=76300 Disallowance of interest u/s 36(1)(iii) - The AO had disallowed the interest claimed by the assessee on advances made to its Director, citing a lack of nexus between the advances and the business activities of the assessee. The assessee contended that the advances were made for business purposes and out of commercial expediency. - The Appellate Tribunal recognized the importance of establishing a clear nexus between the advances and the business activities of the assessee. It also emphasized the need to verify the availability of interest-free funds with the assessee at the time of advancing the loan. - The ITAT ordered the AO to examine the additional evidence provided by the assessee and provide an opportunity for the assessee to substantiate its case. Highlights Income Tax Wed, 03 Apr 2024 08:48:30 +0530 https://www.taxtmi.com/highlights?id=76300