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2019 (12) TMI 912 - AT - Income TaxDeduction on account of interest u/s 36(1)(iii) - as per DR before us is that the case of the assessee of commercial expediency behind the incurring of interest expenditure in question was not substantiated by any documentary evidence and the CIT(A) accepted the case of the assessee without considering this vital aspect - HELD THAT:- In the present case, the commercial expediency of the interest expenditure in question was duly established by the assessee and on appreciation of the relevant facts of the case of the assessee as well as keeping in view the decision in the case of S.A. Builders [2006 (12) TMI 82 - SUPREME COURT] as well as Reliance Communications Infrastructure Ltd. 2006 (12) TMI 82 - SUPREME COURT] the claim of the assessee for the interest expenditure was allowed by the Ld. CIT(A). We, therefore, find no merit in the contention of the DR that the claim of the assessee for interest expenditure was allowed by the CIT(A) without considering the vital aspect of commercial expediency. In our opinion, when the relevant borrowed funds were utilised by the assessee company for making investment in its subsidy engaged in the same business, the business purpose of the investment as well as its commercial expediency was duly established and the interest paid by the assessee on the borrowed funds was allowable as deduction u/s 36(1)(iii) as held interalia by the Hon’ble Supreme Court in the case of S.A. Builders (supra) as well as by the Hon’ble Bombay High Court in the case of Reliance Communications Infrastructure Ltd. (supra). - Appeal of the Revenue is dismissed.
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