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2020 (1) TMI 406 - HC - Income TaxClaim of interest on borrowed funds utilised for investment in shares of CESC - expenditure incurred wholly and exclusively for the purpose of business - Treated as business expenditure on the ground that investment is one of the objectives of the assessee company - HELD THAT:- As decided in Commissioner of Income Tax (Vs) R.P.G.Transmissions Limited (later on name changed to M/s.KEC International Ltd [2014 (2) TMI 238 - MADRAS HIGH COURT] tribunal for allowing the assessee's claim of interest paid on borrowed capital. The appellate authority and the Tribunal found that the investment made in shares by the assessee by utilising borrowed capital was for strategic business purposes because the companies were promoted as special purpose companies to strengthen and promote its existing business by combining different business segments and, therefore, the claim was fully allowable under Section 36(1)(iii). We also found that the Revenue did not adduce any material to show that the borrowed capital was utilised by the assessee for non-business purposes. The appellate authority, in our considered view, was correct in allowing the claim of the assessee and deleting the disallowance made by the assessing authority. We also find that the Tribunal in correct appreciation of the matter had in turn confirmed the finding of the appellate authority. - Decided in favour of the assessee
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