HomeDirect TaxNo Interest Disallowance When Sufficient Interest-Free Funds Exist Despite Partners’ Drawings: ITAT

No Interest Disallowance When Sufficient Interest-Free Funds Exist Despite Partners’ Drawings: ITAT

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The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has deleted an interest disallowance of Rs. 2.88 crore made under Section 36(1)(iii) of the Income Tax Act, 1961, holding that no diversion of borrowed funds can be alleged merely because partners made drawings, when the assessee possessed ample interest-free funds. The bench of Sanjay…

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Mariya Paliwala
Mariya Paliwalahttps://www.jurishour.in/
Mariya is the Senior Editor at Juris Hour. She has 7+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started her career as a freelance tax reporter in the leading online legal news companies.

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