Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2017 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (8) TMI 185 - HC - Income TaxDisallowing interest under Section 36(1)(iii) - Held that:- A perusal of the order passed by the Tribunal shows that relying upon the judgment of this Court in Bright Enterprises Private Limited Vs. Commissioner of Income Tax (2015 (11) TMI 342 - PUNJAB & HARYANA HIGH COURT) it was recorded that commercial expediency in advancing loans does not arise only on account of there being transactions directly between the holding company and the subsidiary company or between the group companies inter se. The two companies may even be in a different line of business. It would make no difference. It would still be commercially expedient for one group company to advance amounts to another group company. In the present case, the impugned advance had been made out of interest free funds available with the assessee and, therefore, there was no question of disallowing interest under Section 36(1)(iii) of the Act. After considering the entire evidence on record and the case law on the point, it was concluded by the Tribunal that disallowance of interest under Section 36(1)(iii) of the Act pertaining to the sister concerns was not justified. - Decided in favour of assessee.
|