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The Tax PublishersM.A. 03/Mum/2017 & ITA No. 365/Mum/2016
2019 TaxPub(DT) 0547 (Mum-Trib)INCOME TAX ACT, 1961
Section 36(1)(iii)
Where advances were given to staff out of assessee's own funds, there was no justification to make addition under section 36(1)(iii).
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Business deduction under section 36(1)(iii) - Interest on interest-free advances to staff - Advances given out of assessee's own funds -
Only issue involved in instant case was in respect of deletion of disallowance of interest as per provisions of section 36(1)(iii), on interest free advances given by assessee to its staff.Held: Assessee's own funds in form of share capital and reserves were Rs. 2.81 crores, whereas advances to staff were only to the tune of Rs. 57.58 lakhs and therefore, there was no justification for AO to make addition under section 36(1)(iii) as no disallowance was required to be made.
Followed:CIT-2, Mumbai v. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom-HC) : 2014 TaxPub(DT) 3351 (Bom-HC) and CIT v. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom-HC) : 2009 TaxPub(DT) 1275 (Bom-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12
IN THE ITAT, MUMBAI BENCH
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