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2015 (3) TMI 844 - HC - Income TaxInterest free loans advance to sister concern - whether were for business purpose or commercial expediency was not proved by the assessee - Held that:- In the present facts, we find that the CIT(A) has in the impugned order rendered a finding of fact that there was trade transaction between the Respondent Assessee and its group concern - M/s. Suraj Diamonds Consultancy Pvt. Ltd. during the subject Assessment Year i.e. A. Y. 2007-08. Once the fact of business relationship between the Respondent Assessee and the group concern is established and accepted, then the amount advanced by the Respondent Assessee to its group concern would result in allowing of interest expenditure incurred by the Respondent-Assessee on the amount of loan borrowed by him As decided in S.A. Builders case [2006 (12) TMI 82 - SUPREME COURT ] 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 assesee itself), the Revenue cannot justifiably claim to put itself in the armchair of the businessman or in the position of the board of directors and assume the role of decide how much is reasonable expenditure having regard to the circumstances of the case. No businessman can be compelled to maximize his profit.we have to see the transfer of the borrowed funds to a sister concern from the point of view of commercial expediency and not from the point of view whether the amount was advanced for earning profits - Decided in favour of assessee.
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