2023 (5) TMI 541

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....f the Income Tax Act, 1961 (hereinafter referred to as Act) dated 23.12.2018 by the ld. Assistant Commissioner of Income Tax, Central Circle-15, Delhi (hereinafter referred to as ld. AO). 2. The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in upholding the disallowance of interest in the sum of Rs. 8,32,459/- in the facts of circumstances of the case. 3. We have heard rival submissions and perused the materials available on record. The ld. AO observed that the assessee company was incorporated on 14.12.1994 with the main object to lend money and negotiate loans of every description, and shall not do any banking business. The ld. AO observed that the assessee had debited a sum of Rs. 1,18,79,501....

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....72 51,58,204 Nil 143(1) - 8 2016-17 1,18,79,501 1,10,56,045 8,23,459 143(3) Disputed in appeal 5. The ld. AR submitted that during the year under consideration, the assessee had sufficient interest free funds in its kitty which were utilised for advancing interest free loans to certain parties. Hence the disallowance of interest need not be made u/s. 36(1)(iii) of the Act. She also placed on record a copy of decision of the co-ordinate bench of this Tribunal in ITA No. 1207/Del/2018 dated 29.08.2018 for A.Y. 2014-15 in assessee's own case wherein in similar disallowance made was deleted by this Tribunal. 6. Per contra, the Ld. DR argued that assessee, being a non-finance company (NBFC), the main source....

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....nterest at lower rate than its borrowing rate or received nil interest. This aspect is very well settled by the decision of Hon'ble Supreme Court in the case of Reliance Industries Ltd. and S.A Builders Ltd. In any case, the issue in dispute squarely covered by the decision of this Tribunal in assessee's own case for the assessment year 2014-15 in ITA no. 1207/Del/2015 dated 29.08.2018 wherein it was held as under:- 8. After hearing both the sides and on perusal of the relevant material on record, I find the Assessing Officer disallowed an amount of Rs.5,39,940/- u/s 36(1) (iii) on the ground that the assessee has diverted its interest bearing funds as loans and advances to sister concerns and others without charging of any interes....