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2017 (9) TMI 48 - HC - Income TaxDisallowance of interest on borrowed funds on account of diversion by the assessee to its sister concern - Commercial expediency - Held that:- CIT (Appeals) as well as the Tribunal both, after examining facts on record, found that there was sound commercial expenses in the assessee financing activities of the sister concern, who was acting as sales agent of the assessee and was otherwise in dire financial constraint.Also Section 37 states that the expression "for the purpose of business" includes expenditure voluntarily incurred for commercial expediency See Hero Cycles P. Ltd vs. Commissioner of Income Tax [2015 (11) TMI 1314 - SUPREME COURT OF INDIA ] Advance to subsidiary pursuant to undertaking given to financial institution by the assessee to provide additional margin to subsidiary to meet working capital for meeting cash losses could not be disallowed as business expenditure. - Decided in favour of assessee
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