2015 (3) TMI 228

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....he A.O. found that assessee has debited an amount of Rs. 9,99,569/- as interest on the borrowed funds ostensibly for the purpose of business. From the details of loans and advances it was noticed that funds of business of Rs. 51,05,000/-are lying with the relatives/friends of the assessee and these are not for the purpose of business. The assessee was asked to explain as to why interest be not disallowed. It was submitted that with regard to the advance given to Shri Karan Sagar and Priyanka Sagar, these are personal educational loans to the son and daughter of the assessee and the amount debited to the amount of Shri Girish Sagar for jointly purchasing of property which could not materialize and received back in subsequent years. The A.O. ....

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....t can be disallowed. He has relied upon the following decisions:- I. Radio Khaitan and Co. Vs. CIT 274 ITR page 354 Allahabad High Court. II. CIT Vs. Prem Heavy Engineering Works (P) Ltd. (2006) 150 Taxman Page 90 Allahabad High Court. III. CIT Vs. Harbhajan Sarbjeet Singh (2006) 151 Taxman Page 127. IV. CIT Vs. Reliance Utilities (2009) 313 ITR Page 340, Bombay High Court. V. S.A. Builder Vs. CIT 206 CTR Page 631 S.C. VI. CIT Vs. Tin Box Factory (2004) 135 Taxman, 145 Delhi High Court. VII. Pranik Service Ltd. Vs. ACIT (2012) 146 TTJ Page 543 (Bombay). 5. We may note here that in the case of Reliance Utility Power Ltd. (Supra) it was held that if there were funds available both interest free and overdraft/loans taken, then the pres....