DCIT, CENTRAL CIRCLE-2(3), BENGALURU, BENGALURU vs. PRONOMZ VENTURES LLP, BENGALURU

ITA 1702/BANG/2025Status: DisposedITAT Bangalore31 August 2026AY 2020-2117 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the interest expenditure was incurred for the purposes of the assessee's business. It was also noted that sufficient interest-free funds were available to cover the investments, supporting the allowability of the interest.

What were the facts?

The Assessing Officer disallowed interest expenditure claimed by the assessee, arguing that borrowed funds were not used for business purposes but were advanced as interest-free loans or invested in shares. The CIT(A) allowed the assessee's appeal, leading to the present appeal by the revenue.

What were the issues?

Whether interest expenditure on borrowed funds used for investments in group companies and for advancing loans is allowable as a business expenditure.

Which sections of the Income-tax Act were involved?

Section 36(1)(iii),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY

PER SHRI PRASHANT MAHARISHI, VICE PRESIDENT:

01.

This appeal has been filed by the Deputy Commissioner of Income Tax, Central Circle– 2(3), Bangalore (“the learned Assessing Officer”), against the appellate order passed by the Commissioner of Income Tax (Appeals)–15, Bangalore (“the learned CIT(A)”) for Assessment Year 2020–21. In that order, the learned CIT(A) allowe

The order continues below.

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