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2019 (8) TMI 1057 - AT - Income TaxAddition of interest on paid on loan - diversion of fund - advanced it to sister concern/group at lower rate - commercial expediency in such transaction - HELD THAT:- The assessee in the instant appeal is a NBFC registered with its object of taking loans and advancing loans for earning interest or other income from investments. In both the years in appeal the assessee has taken loans from financial institutions on varying interest rates. It has also issued debentures in the past. Amounts have been advanced as loans as well as investments to other concerns which presently are only to the group/sister concerns. It is not the case that interest free loans have been given. Assessee has charged interest at varying rate depending on the market conditions and based on the needs of the concerns taking loan. Though it is not necessary that earning of profit is mandatory for the business concern to prove that the transactions entered into by it are for commercial expediency but still if the business concern show profit at the end of the year, it is an added feature which proves that the transactions entered by the concern are for commercial expediency and in the regular course of business. No inconsistency in the order of Ld. CIT(A) deleting the addition of notional interest made - Decided in favour of assessee.
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