Assessee-company advanced interest-free loans to its subsidiary . Assessing Officer made disallowance on account of interest paid on borrowed funds under section 36(1)(iii) . CIT(A) deleted the disallowance . Order of CIT(A) is affirmed by the Tribunal . On appeal the Court held that \u00a0the assessee was holding company and had a deep interest in its subsidiary . \u00a0There was no allegation at all that loans advanced by assessee were utilized for personal benefit of directors of subsidiary . \u00a0Besides, there was material on record that interest free loans advanced to subsidiaries were not from borrowed monies. \u00a0Material on record suggested that assessee had reserves of huge amount to cover such loans advanced to its subsidiary .\u00a0 On facts, there could not be any disallowance of interest under section 36(1)(iii) and, accordingly. Order of\u00a0 Tribunal is affirmed . (AY. 2011- 12 )<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 36(1)(iii) :Interest on borrowed capital \u2013 Advance of interest-free loans to its subsidiary \u2013 Commercial expediency – Sufficient interest-free funds \u2013 Order of Tribunal deleting the addition is affirmed \u2013 No substantial question of law .[ S.260A ] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-49161","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-cMV","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/49161","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=49161"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/49161\/revisions"}],"predecessor-version":[{"id":49162,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/49161\/revisions\/49162"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=49161"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=49161"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=49161"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}