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2022 (5) TMI 1378 - ITAT AHMEDABADDisallowance u/s 36(1)(iii) - commercial expediency to give no interest loans - assessee has extended substantial amount as loan to one of its director during the financial year, and not charged interest on the loan amount - HELD THAT:- Though the assessee’s claim that payment made to the Director, Shri Kamal Deshraj Dogra was for business expediency, but the assessee could not prove before us the nexus between the assessee-company with its subsidiary company in the nature of trade and business. Furthermore, Shri Kamal Deshraj Dogra being director of both the companies, payments made directly to the common director of the company is not established with proper material on hand for the socalled business exigency. Thus, the assessee’s arguments that there was a running account with the sister concern viz. Kamal Freight Pvt.Ltd., which was not demonstrated any business expediency between the assessee company with that of its subsidiary company. In the above circumstances, we do not find any infirmity in the order passed by the lower authorities, more particularly, the ld.CIT(A) has clearly held that judgement of S.A. Builders facts [2006 (12) TMI 82 - SUPREME COURT] is not applicable to the assessee’s case. Punjab & Haryana High Court in the case of C.R. Auluck & Sans P.Ltd., [2014 (2) TMI 73 - PUNJAB AND HARYANA HIGH COURT] has also upheld disallowance made under section 36(1)(iii) of the Act on the ground that the assessee has failed to establish commercial expediency in doing the financial transactions. Thus, we have no hesitation in upholding the order of the CIT(A), and this ground raised by the assessee are hereby rejected, accordingly, appeal filed by the assessee is dismissed.
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