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2018 (4) TMI 1520 - AT - Income TaxInterest expense as allowable u/s 36(1)(iii) - scope of investment in MHICL - Investment for busniss purposes - Held that:- In the absence of any dispute as to the fact of MHICL is the holding company of MMCL, MMCL having the same line of the business as that of the assessee, by such an investment in MHICL, the assessee sought to have controlling interest in MMCL and the said strategy yielded fruits in the form of increase in sales by ₹ 1,84,00,390/- during the assessment year, by no stretch of imagination, could it be said that the investment is not for the strategic for the purpose of expansion of the business simply because the holding company does not do the same business as that of the assessee. There is nothing material on record to brush aside the submission of the assessee that through MHICL the assessee acquired controlling interest in MMCL for furtherance of their business interest. The investment of the borrowed funds by the assessee in MHICL is for business purpose, as such, the interest expense is allowable u/s 36(1)(iii) of the Act. With this view of the matter, we hold that the interest expense claimed by the assessee is allowable u/s 36(1)(iii) and the AO will delete the same. - Decided in favour of assessee.
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