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2011 (1) TMI 148 - AT - Income TaxDisallowance of Interest - The AO worked out the interest @ 12% on the closing balance of Rs. 1,81,06,555 amounting to Rs. 21,62,787 and disallowed the same from the total interest expenses and added the same to the total income of the assessee - Supreme Court in the case of S.A. Builders Ltd. v. CIT (2006 -TMI - 3364 - SUPREME COURT)has observed that the expression "for the purpose of business" includes expenditure voluntarily incurred for commercial expediency and it is immaterial if a third party also benefits thereby. The Hon'ble Supreme Court further observed that the expression "commercial expediency" is an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The expenditure may not have been incurred under any legal obligation but yet it is allowable as business expenditure if it was incurred on grounds of commercial expediency. the expenditure incurred towards advertisement for and on behalf of holding company are undoubtedly on grounds of commercial expediency inasmuch as the assessee undoubtedly would be benefited by making advertisement of the brand name Adidas to augment and promote sale effected by the assessee in the notified territories - Accordingly the appeal of the assessee is allowed
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