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2013 (10) TMI 1326 - HC - Income TaxCommercial expediency in giving interest free loans to M/s HMGB which was a joint venture company of the assessee with Hindustan Antibiotics Limited - Held that:- CIT (A) and the Tribunal had concluded that there was commercial expediency in giving interest free loan to HMGB and the deduction was admissible under Section 36(1) (iii) of the Act. There is sufficient material to show that the relationship of the assessee with its subsidiary, HMGB was based on commercial expediency and the advancing of the amount was for business purpose. In this regard, we may make a reference to the order of the CIT(A) for assessment year 2004-05 which is also subject mater of appeal before us. The CIT(A) has tabulated the price advantage to the assessee on purchases made from HMGB, an uncontroverted fact, which clearly indicates commercial prudence apart from ensuring continuous and timely supplies. Thus, on the grounds of consistency and commercial expediency, the deduction claimed by the assessee company is in accordance with law and the CIT) (A) correctly allowed the claim of the assessee. In view of the findings of fact recorded by CIT(A) and the Tribunal that there existed commercial expediency in giving interest free loan to HMGB, which findings are not shown to be against the record, no advantage can be derived by the revenue from the pronouncement reported in Abhishek Industries Limited's case (2006 (8) TMI 123 - PUNJAB AND HARYANA High Court). In so far as Motor General Finance Limited [2001 (12) TMI 62 - DELHI High Court] and Indian Shavings Products Limited's cases (2003 (3) TMI 33 - RAJASTHAN High Court ) are concerned, these pronouncements were prior to judgment of the Apex Court in S.A.Builders's case (2006 (12) TMI 82 - SUPREME COURT ). Further, on factual matrix therein, no commercial expediency was shown to be existing and therefore, in view of distinguishable circumstances involved, these do not advance the case of the revenue. - Decided in favour of assessee.
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