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2013 (8) TMI 366 - AT - Income TaxDisallowance of interest paid on loan - CIT deleted disallowance - Held that:- once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), 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 - Following decision of CIT v. Dalmia Cement (B.) Ltd. [2001 (9) TMI 48 - DELHI High Court] and Munjal Sales Corporation Vs. CIT [2008 (2) TMI 19 - Supreme Court] - Decided in favour of assessee. Disallowance u/s. 14A - CIT upheld partial diallowance - Held that:- The assessee has sufficient interest free funds and hence no inference could be drawn that these investments were made out of borrowed funds - Commissioner of Income Tax (A) has decided the issue by restricting the addition u/s. 14A to ₹ 20,000/- which is the total value of investment, the income from which is exempt from tax. No contrary decision to the above has been shown - Decided against Assessee.
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