Held that disallowance of interest expenses was improper as the Assessing Officer ignored the presumption that where an Assessee has mixed funds, interest-free advances are deemed to be given out of interest-free funds. Since the Assessing Officer had failed to base his findings on a constructive examination of the evidence on record, the deletions were held to be justified. (AY. 1988-89)
PCIT, v. Bhupendra Champaklal Delal [2024] 160 taxmann.com 560 (Bom.)(HC)
S. 36(1)(iii) :Interest on borrowed capital-Mixed funds-Interest-free advances are deemed to be given out of interest-free funds-Order of Tribunal deleting the disallowance is affirmed.[S. 260A]
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