https://www.taxtmi.com/caselaws?id=465048 ITAT Chennai allowed the assessee's appeals and deleted the disallowance of interest made on advances to its wholly owned subsidiary. It held that the AO and CIT(A) erred in concluding that the assessee lacked own funds, noting that substantial interest-free share application money, share capital and reserves were available, aggregating to over Rs. 45 crore. As the assessee had sufficient interest-free funds to cover the advances, no presumption of diversion of interest-bearing borrowings could be drawn. The proportionate interest disallowance was held perverse and unsustainable in law. en-us Fri, 04 Jul 2025 00:00:00 +0530 Tue, 02 Dec 2025 21:24:41 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=465048 ITAT Chennai allowed the assessee's appeals and deleted the disallowance of interest made on advances to its wholly owned subsidiary. It held that the AO and CIT(A) erred in concluding that the assessee lacked own funds, noting that substantial interest-free share application money, share capital and reserves were available, aggregating to over Rs. 45 crore. As the assessee had sufficient interest-free funds to cover the advances, no presumption of diversion of interest-bearing borrowings could be drawn. The proportionate interest disallowance was held perverse and unsustainable in law. Case-Laws Income Tax Fri, 04 Jul 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=465048