https://www.taxtmi.com/caselaws?id=762326 ITAT Ahmedabad allowed the assessee's appeal regarding disallowance under Section 36(1)(iii) for interest expenses on unsecured borrowings while advancing interest-free loans. The tribunal found assessee had sufficient interest-free funds exceeding the advances made. Following CIT v. Reliance Industries Ltd., where adequate interest-free funds exist, presumption arises that advances are made from such funds. Revenue failed to establish direct nexus between borrowed funds and advances. The tribunal also allowed deduction for sundry balances written off as employee advances, treating them as deductible business expenses under Section 37 despite non-compliance with Section 36(2). en-us Wed, 27 Nov 2024 00:00:00 +0530 Thu, 28 Nov 2024 17:52:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=762326 ITAT Ahmedabad allowed the assessee's appeal regarding disallowance under Section 36(1)(iii) for interest expenses on unsecured borrowings while advancing interest-free loans. The tribunal found assessee had sufficient interest-free funds exceeding the advances made. Following CIT v. Reliance Industries Ltd., where adequate interest-free funds exist, presumption arises that advances are made from such funds. Revenue failed to establish direct nexus between borrowed funds and advances. The tribunal also allowed deduction for sundry balances written off as employee advances, treating them as deductible business expenses under Section 37 despite non-compliance with Section 36(2). Case-Laws Income Tax Wed, 27 Nov 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=762326