| COURT: | |
| CORAM: | |
| SECTION(S): | |
| GENRE: | |
| CATCH WORDS: | |
| COUNSEL: | |
| DATE: | (Date of pronouncement) |
| DATE: | February 18, 2009 (Date of publication) |
| AY: | |
| FILE: | |
| CITATION: | |
Advances to sister concerns must be presumed to have come out of own funds and not borrowed funds.
Where the assessee had its own funds as well as borrowed funds and it advanced funds to its sister concerns for allegedly non-business purposes and the question arose whether the AO was justified in disallowing the interest on the borrowed funds on the ground that they had been used for non-business purposes, HELD:
Where an assessee has his own funds as well as borrowed funds, a presumption can be made that the advances for non-business purposes have been made out of the own funds and that the borrowed funds have not been used for this purpose. Accordingly, the disallowance of the interest on the borrowed funds is not justified.
[…] In the case Reliance Utilities & Power Ltd (ITA No 1398 of 2008-order dated 9.1.2009 of Hon’ble Bombay High Court), the assessee made […]