https://www.taxtmi.com/caselaws?id=798215 Interest-free advances are presumed to be funded from interest-free capital where such funds exceed the advances and no nexus is established between borrowed funds and the advances; proportionate interest disallowance under Section 36(1)(iii) was therefore deleted. Book profit credited to partners' capital accounts, supported by audited accounts and corresponding profit-and-loss appropriation entries, does not constitute an unexplained cash credit under Section 68 because it records no unexplained receipt or inflow. Reassessing disclosed profit as cash credit would amount to double taxation. Depreciation claimed in computing income does not alter the explained nature of the book profit. Both additions were removed. en-us Mon, 31 Aug 2026 00:00:00 +0530 Thu, 03 Sep 2026 08:20:54 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=798215 Interest-free advances are presumed to be funded from interest-free capital where such funds exceed the advances and no nexus is established between borrowed funds and the advances; proportionate interest disallowance under Section 36(1)(iii) was therefore deleted. Book profit credited to partners' capital accounts, supported by audited accounts and corresponding profit-and-loss appropriation entries, does not constitute an unexplained cash credit under Section 68 because it records no unexplained receipt or inflow. Reassessing disclosed profit as cash credit would amount to double taxation. Depreciation claimed in computing income does not alter the explained nature of the book profit. Both additions were removed. Case-Laws Income Tax Mon, 31 Aug 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=798215