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2019 (1) TMI 1475 - BOMBAY HIGH COURTInterest free loans given to sister concerns - proof of commercial expediency - Held that:- The business of the assessee is that of dealers of automobiles. Its sister concerns to whom monies are advanced, are engaged in manufacture of bus bodies and running of petrol pump. In these facts, both CIT (A) and the Tribunal found that the business run by respondent's sister concerns to whom money is advanced is complementary to its business. The Apex Court in S.A. builders Limited (2006 (12) TMI 82 - SUPREME COURT ) had held that whether a particular advance made to the sister concerns is on account of business exigency is a decision which the businessman has to take and it is not for the Income Tax Authrities to put themselves in the shoes of the assessee and decide the matter of commercial expediency from the point of view of the profitability. In fact, the Apex Court also observes that no businessman can be compelled to maximize its profits. The only exception in the above order was where the money has been advanced to the sister concerns and the money is not used by the sister concerns/subsidiaries for business purpose, then alone the interest paid on borrowed amounts will be disallowed. - Decided against revenue
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