Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (4) TMI 699 - AT - Income TaxDisallowance of interest expenses - Held that:- Once it is established that there is nexus between expenditure and the purpose of 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 businessman or in position of Board of Directors and assume role to decide how much is reasonable expenditure having regard to the circumstances of case. No businessman can be compelled to maximize his profit and that the revenue authorities must put themselves in the shoes of the assessee and see how a prudent businessman would act. Considering the fact that the assessee has made land business profit of 5.45 crores in the light of the ratio laid down in the case of Hero Cycles (P) Ltd. [2015 (11) TMI 1314 - SUPREME COURT OF INDIA ]. We do not find any merit in making the addition on account of loss of interest @ 6%, we accordingly set aside the findings of the ld. CIT(A) and direct the A.O to delete the addition - Decided in favour of assessee
|