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2020 (10) TMI 1160 - HC - Income TaxDisallowance u/s 36(1)(iii) - assessee had advanced interest bearing funds without charging any interest - Whether Tribunal was right in not considering the fact that the matching principle in terms of income and expenditure is not applicable when cash system of accounting is followed as sine qua non for allowability of expenditure there should be nexus between the income and expenditure reported for the year in question as applicable in terms of Sections 36 and 37 ? - HELD THAT:- As decided in own case [2019 (4) TMI 570 - MADRAS HIGH COURT] when the cash system of accounting was adopted by the Assessee, an Investment Company, whose business is only to borrow and lend or invest, the same cannot be said to be not in the business interest or commercially expedient for the purpose of business and the concept of 'Matching Principles', which has been applied by the Assessing Authority and the CIT (A) in the present case, was not really applicable. It is not for the Revenue authorities to substitute their own wisdom or notion about the rate of interest agreed to between the parties, including the group companies and, as such, the finding of fact about commercial expediency or absence thereof is a finding of fact, out of which, no substantial question of law can be said to be arising, requiring our consideration under Section 260A of the Act. Moreover, since in the case of Assessee company itself, this Court has only decided on similar facts earlier and dismissed the Revenue's Appeal, we do not find any reason to take a different view of the matter for the Assessment Years in question before us. - Decided against revenue.
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