Capricorn Lifestyle (P.) Ltd. v. DCIT (2024) 209 ITD 14 (Pune) (Trib.)

S. 36(1)(iii) :Interest on borrowed capital-Interest free advances-Sufficient own capital and free reserves-Disallowance of interest is deleted.

Assessee-company had advanced interest free loan to its sister concern. Assessing Officer disallowed proportionate interest expenditure. CIT(A) up held the order of the AO. On appeal the Tribunal held that  since assessee had sufficient own capital and free reserves and surpluses which far exceeded amount of interest free advance given to sister concern,  disallowance is deleted.  (AY. 2021-22)