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2018 (6) TMI 1776 - AT - Income TaxDisallowance u/s 36(1)(iii) - HELD THAT:- As recorded by the Ld. CIT (A) that the investment in the partnership firm was made exclusively for the purpose of the business. It has also been noted by the Ld. CIT (A) that the advances recoverable and forward-cover receivable included in the advances are business advances and have been given to suppliers with whom regular business transactions are under taken. Similarly with respect to the advance given to DLF Ltd., CIT (A) has noted that the same has also been given for the purpose of business. The Ld. CIT (A) has also noted that apart from these advances, there were other advances also but on which interest has duly been charged by the assessee. CIT (A) has also placed reliance on the judgment of the Hon’ble Apex Court in the case of S.A. Builders Ltd. [2006 (12) TMI 82 - SUPREME COURT] wherein as held that an expenditure may not have been incurred under any legal objection but yet it is allowable as a business expenditure if it was incurred on the grounds of commercial expediency. We note that the Hon’ble Apex Court has also 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. CIT (A) has also referred to the judgment of Hon’ble Delhi High Court in the case of CIT vs. Dalmia Cement (Pvt.) Ltd. [2001 (9) TMI 48 - DELHI HIGH COURT] wherein it had been held that once it was established that there was a nexus between the expenditure and the purpose of business, the revenue cannot justifiably claim to put itself in the armchair of the businessman and take up the role to decide as to how much is reasonable expenditure having regard to the circumstances of the case. CIT (A) has given a categorical finding that in the instant case the loans and advances have been given on account of commercial expediency. DR could not point out any factual inaccuracy in the findings of the CIT (A) nor could she point out how the impugned order was not legally sustainable. Accordingly, we find no reason to interfere with the findings of the CIT (A) on this issue and we dismiss the grounds raised by the department.
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