Nayara Energy Ltd. v. ACIT (2024) 232 TTJ 353 / 244 DTR 89/ 38 NYPTTJ 1162 (Mum)(Trib)

S. 36(1)(iii) :Interest on borrowed capital-Interest is not charged on inter-corporate deposits made with group companies-No evidence of commercial expediency-Disallowance is justified.

Held that the assessee has advanced borrowed funds to its sister concerns without charging any interest, hence AO was justified in disallowing the interest paid by it on intercorporate deposits in excess of the interest received on inter-corporate deposits made with group entities. (AY. 2017-18)

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