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| The Tax Publishers2020 TaxPub(DT) 2445 (Ctk-Trib) INCOME TAX ACT, 1961
Section 36(1)(iii)
Although the onus was on assessee to establish that no amount of interest-bearing loan was being used to extend interest-free loan, however, the assessee was not properly show caused by the Revenue enabling it to establish that no amount of interest-bearing loan was used for advancing interest free loan. Therefore, the matter with regard to disallowance of interest was remanded to the AO for afresh examination and verification after allowing due opportunity to the assessee.
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Business deduction under section 36(1)(iii) - Interest on borrowed capital - Interest-bearing loan being used to extend interest-free loan - Revenue failed to provide proper opportunity to assessee to present its case
AO made disallowance of interest alleging that interest-bearing loan were used by assessee for providing interest-free loan. Held: Although the onus was on assessee to establish that no amount of interest-bearing loan was being used to extend interest-free loan, however, the assessee was not properly show caused by the Revenue enabling it to establish that no amount of interest-bearing loan was used for advancing interest free loan. Therefore, the matter was remanded to the AO for afresh examination and verification after allowing due opportunity to the assessee.
REFERRED :
FAVOUR : Matter remanded
A.Y. :
INCOME TAX ACT, 1961
Section 254
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