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2010 (1) TMI 68 - HC - Income TaxDeduction - Commissioner paid to direction – interest payable in respect of investment – application of section 40A(2)(a), payment to relatives – held that – the appellant was justified in paying commission to its directors against value of the order secured from M/s Shree Balaji Poly Packs and the personal guarantee offered by the Directors for the performance and value of goods delivered for conversion. – deduction of commission pad to directors allowed - In this case, the assessee has an object for investment and has also got orders from the said M/s Virgo Polymers India Limited to the extent of 80 to 90 percent and hence, there is a commercial expediency. Further there is no proof that the borrowed amount has actually been diverted to investment. Therefore, after taking into consideration the object of the assessee as well as the investment was made due to commercial expediency and also there is no nexus between the borrowed amount, the Tribunal is correct in holding that the investment in shares was made keeping in view the commercial interest of the assessee.
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