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2016 (3) TMI 365 - AT - Income TaxDisallowance of interest - nexus between the expenditure and the purpose of business - Held that:- As the assessee company made the contribution in the partnership firm M/s Abhitex International wherein it was having 12% share. The amount was invested keeping in view the business expediency as the group to which the assessee belonged acquire the entire share holdings of RMZ Corporation Holdings Pvt. Ltd., so it was not a case of divertion of borrowed fund, rather it was investment as a capital in the firm M/s Abhitex International for the business purposes and in the light of commercial expediency. Thus , we are of the view that the disallowance of interest made by the AO and sustained by the ld. CIT(A) was not justified. In that view of the matter the impugned disallowance is deleted. - Decided in favour of assessee
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