TMI Blog2015 (1) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014 - MR. KS JHAVERI AND MR. K.J.THAKER, JJ. FOR THE APPELLANT : MR KM PARIKH, ADVOCATE JUDGEMENT Per: K S Jhaveri: 1. By way of this appeal, the appellant-revenue has challenged the order dated 22.02.2005 passed by the Income Tax Appellate Tribunal [for short the Tribunal ] in ITA No.1839/Ahd/2003, whereby the appeal filed by the assessee was partly allowed by the Tribunal. 2. The facts, in brief, are that the assessee filed its return for the Assessment Year 1998-99. The Assessing Officer, after scrutiny, made disallowance of ₹ 17,38,362/- being interest expenditure on the ground that the assessee had given interest free advances to the parties. The Assessing Officer noted that funds of ₹ 169.54 lacs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt. It is relevant to reproduce paragraph Nos. 35 to 37 of the said decision, which read as under:- 35. We agree with the view taken by the Delhi High Court in CIT vs. Dalmia Cement (Bhart) Ltd. (2002) 254 ITR 377 that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justifiably claim to put itself in the arm-chair of the businessman or in the position of the board of directors and assume the role to decide how much is reasonable expenditure having regard to the circumstances of the case. No businessman can be compelled to maximize its profit. The income tax authorities must put themselves in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r authorities and remand the matter to the Tribunal for a fresh decision, in accordance with law and in the light of the observations made above. 6. Since the question of law involved in this appeal is already concluded by the Apex Court, no elaborate reasons are required to be assigned by us for disposing this appeal. In that view of the matter, we are of the considered opinion that the present appeal deserves to be dismissed and the same is accordingly dismissed. The question of law raised in this appeal is answered in favour of the assessee and against the revenue. Accordingly, we hold that the Tribunal was right in deleting the disallowance of interest of ₹ 17,38,362/- being on interest free advances/loans. - - TaxTMI - TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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