2013 (2) TMI 754

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....sent Tax Appeal, which arises from the decision of the Income-tax Appellate Tribunal ("Tribunal" for short) dated 2nd March 2012 :- "Whether in the facts and circumstances of the case, the learned ITAT has erred in law in confirming the order of CIT(A) deleting the addition of Rs. 28,68,776/- on account of interest claimed by the Assessee u/s. 36(1) (iii) of the Act ?" Heard learned advocate Mr....

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....ome from the business. Noting that the interest payable on the capital borrowed since is a liability till it is repaid, such interest is allowable under proviso to Section 36[1](iii) of the Act. On noticing that there was substantial diversion by the assessee of such interest bearing funds towards interest free loans and advances, and towards non-business investment, the total amount held to be di....

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....ed before the Tribunal by the revenue, it concurred with the findings of the CIT [A]. It also noticed that the total interest-free funds available with the respondent was to the tune of Rs. 1.74 Crores and the advances and investments made were at Rs. 1.59 Crores. The Tribunal also followed the treatment given to such issue of disallowance of interest in case of sister-concern and not having found....