Dismissing the appeal of the revenue the Tribunal held that, presumption is that the advance to sister concern is made from own funds is good law .Dept’s argument that Maxopp Investment Ltd v.CIT ( 2018) 402 ITR 640 (SC) /Avon Cycles Ltd. v. CIT (P & H (HC) (ITA No. 277 of 13 ) overrules the presumption that advances to sister concerns are made from own funds and not borrowed funds is not correct hence no disallowances can be made. (ITA No. 470/Chd/2018, dt. 16 .10.2018)(AY.2014-15)
ACIT v. Janak Global Resources Pvt. Ltd. (Chd.)(Trib), www.itatonline.org
S. 36(1)(iii) : Interest on borrowed capital-Mixed funds-Presumption is that the advance to sister concern is made from own funds -Dept’s argument that Maxopp Investment Ltd v.CIT ( 2018) 402 ITR 640 (SC) / Avon Cycles Ltd. v. CIT ( P&H (HC) (ITA No 277 of 13) overrules the presumption that advances to sister concerns are made from own funds and not borrowed funds is not correct- No disallowances can be made.