TaxTMI 
TaxTMI 
2023 (6) TMI 1024
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....order of the ld. DCIT, Circle-1, Bathinda order passed u/s 143(3)/263 of the Act. 2. The assessee has taken the following ground: "1. The Id. CIT(A) has erred both in law and on facts in upholding the addition made by the Id. AO amounting to Rs 12,69,700/- in accordance with the provisions of section 36(1)(iii) of the Act by holding that the funds available in the form of sundry creditors are not interest free in nature whereas such funds are interest free funds only. As such, addition confirmed is unjustified and uncalled for. The same be deleted. 2. That the Id. CIT(A) has erred both on law and on facts in upholding the addition made by the Id. AO amounting to Rs 12,69,700/-against the principles of natural justice i.e. without passi....
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....0,99,196/- where assessee is advancing interest free loan amount to Rs. 1,05,80,823/-. Accordingly, the interest was calculated on interest free loan amount and said amount was disallowed u/s 36(1)(iii) of the Act. The assessee filed an appeal and the order of appeal was passed on dated 29.12.2022. The ld. CIT(A) upheld the observation of the ld. AO. Being aggrieved assessee filed an appeal before us. 5. The ld. AR, Mr. Sudhir Sehgal, Advocate vehemently argued and placed that this is an appeal filed by the assessee and the only ground of appeal with regard to sustaining of addition of Rs. 12,69,700/- vide order, dated 16.11.2018 and the matter was carried to the Ld. CIT(A) Bathinda, who vide order, dated 29.05.2019 had set aside the issue....
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....ree advances to the assessee. The Ld. Counsel has also further submitted that the loan funds were taken and used for specific purposes for day to day working of the business of the assessee. The submissions of the assessee are that the interest free funds were available with the assessee including sundry creditors has been held to be in order as per finding given in para 6. page 51 of the paper book. Thus, the interest free funds are available with the assessee and there is no case of disallowance of interest and reliance is being placed on the following judgments as well that if there are sufficient interest free funds, then no disallowance of interest u/s 36(1)(iii) is called for: - i) CIT Vs Reliance Utilities & Power Ltd. [2008] 178 ....
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....d the assessee had urged the contention before the High Court. The principle therefore would be that if there are funds available both interest-free and overdraft and/or loans taken, then a presumption would arise that investments would be out of the interest-free fund generated or available with the company, if the interest-free funds were sufficient to meet the investments. In this case this presumption is established considering the finding of fact both by the CIT (Appeals) and ITAT." ii). CIT Vs Reliance Industries Ltd.[2019] 102 taxmann.com 52 (SC) "7. Insofar as the first question is concerned, the issue raises a pure question of fact. The High Court has noted the finding of the Tribunal that the interest free funds available to t....