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2010 (9) TMI 942 - AT - Income TaxDisallowance of excessive interest paid u/s 40A(2)(a) - HELD THAT:- The ld. CIT(A) concluded that the reasonableness of the expenditure could not be doubted. As pointed in CIT v. Dalmia Cement (B.) Ltd.[2001 (9) TMI 48 - DELHI HIGH COURT], once it is established that there was nexus between the expenditure and the purpose of the business, the Revenue cannot justifiably claim to put itself in the arm-chair of the businessman or in the position of the board of directors and assume the role to decide how much is reasonable expenditure having regard to the circumstances of the case. No businessman can be compelled to maximize his profit. The Income-tax authorities must put themselves in the shoes of the assessee and see how a prudent businessman would act. The authorities must not look at the matter from their own view point but that of a prudent businessman. In the light of view taken in the said decision, we are of the opinion that once it is found that the expenditure had been, as a matter of fact, incurred by the assessee , it is not for the Department to consider whether commercial expediency justified the expenditure. Reasonableness of the expenditure can be gone into only for the purpose of determining whether in fact, the amount was spent. There is no material to show that any part of the amount shown to have been debited under the arrangement subsequently came back. Thus ,especially when the ld. DR appearing before us did not place any material controverting the findings of the ld. CIT(A) in these three assessment years so as to enable us to take a different view in the matter, we are not inclined to interfere with the findings of the ld. CIT(A).Therefore, ground no.3 in the appeals for the AY 2001-02 & AY 2002-03 and ground no. 2 in the appeal for the AY 2003-04 are also dismissed.
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