https://www.taxtmi.com/caselaws?id=775047 ITAT Delhi upheld CIT(A)'s deletion of disallowances regarding transporter payments under section 37(1). The assessee proved genuineness of business expenses by providing payment details, invoices, bank statements, transporter PAN details, addresses, and party confirmations. Payments were made through regular banking channels, establishing legitimate business purpose. Regarding interest disallowance, AO made proportionate disallowance of Rs. 53,86,044 assuming 12% market rate on interest-free loans/advances. ITAT held that interest payments were for term loans for plant, machinery, equipment, and vehicles which couldn't fund interest-free advances. Remaining loans were business loans. Assessee had sufficient interest-free funds available. Following Supreme Court precedent in South Indian Bank Ltd case, ITAT confirmed that when adequate interest-free funds exist, no proportionate interest disallowance can be made. CIT(A)'s deletion of interest disallowance was upheld. Both appeals decided against revenue. en-us Wed, 16 Jul 2025 00:00:00 +0530 Fri, 18 Jul 2025 08:22:41 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=775047 ITAT Delhi upheld CIT(A)'s deletion of disallowances regarding transporter payments under section 37(1). The assessee proved genuineness of business expenses by providing payment details, invoices, bank statements, transporter PAN details, addresses, and party confirmations. Payments were made through regular banking channels, establishing legitimate business purpose. Regarding interest disallowance, AO made proportionate disallowance of Rs. 53,86,044 assuming 12% market rate on interest-free loans/advances. ITAT held that interest payments were for term loans for plant, machinery, equipment, and vehicles which couldn't fund interest-free advances. Remaining loans were business loans. Assessee had sufficient interest-free funds available. Following Supreme Court precedent in South Indian Bank Ltd case, ITAT confirmed that when adequate interest-free funds exist, no proportionate interest disallowance can be made. CIT(A)'s deletion of interest disallowance was upheld. Both appeals decided against revenue. Case-Laws Income Tax Wed, 16 Jul 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=775047