Dismissing the appeal of the revenue the Court held that, Interest-free funds available with assessee is sufficient to meet investment. Presumption is that investments in subsidiaries were out of interest free funds accordingly no disallowance can be made . ( AY. 2003 -04 to 2006 -07)
CIT (LTU) v. Reliance Industries Ltd. (2019) 410 ITR 466/ 175 DTR 1 / 307 CTR 121/ 261 Taxman 165 (SC) Editorial : Order of Bombay High Court in CIT (LTU) v. Reliance Industries Ltd.( ITA Nos 1550/ 1592/ 1775 and 1881 of 2014 dt 22-08 2017, 23 -08 2017 is affirmed( 2018) 161 DTR 420 / (2019) 410 ITR 468 (Bom.)(HC)
S. 36(1)(iii) :Interest on borrowed capital – Interest-free funds available with assessee is sufficient to meet investment — Presumption is that investments in subsidiaries were out of interest free funds — No disallowance can be made.