TMI Blog2015 (3) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... n would result in allowing of interest expenditure incurred by the Respondent-Assessee on the amount of loan borrowed by him As decided in S.A. Builders case [2006 (12) TMI 82 - SUPREME COURT ] 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 assesee itself), the Revenue cannot justifiably claim to put itself in the armchair of the businessman or in the position of the board of directors and assume the role of decide how much is reasonable expenditure having regard to the circumstances of the case. No businessman can be compelled to maximize his profit.we have to see the transfer of the borrowed funds to a sister concern from the point o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed the claim of ₹ 51.95 lakhs being the interest paid on ₹ 8.66 Crores to American Express Bank. In appeal, the Commissioner of Income Tax (Appeals) [CIT(A)] recorded a finding of fact that during the Assessment Year 2007-08, the RespondentAssessee had trade transaction with its group concern - M/s. Suraj Diamonds Consultancy Private Limited. In spite of the holding that there was business relationship between the two, the interest paid was disallowed on the ground that the advance was given in June 2005 and the trade transaction took place only in the subject Assessment Year in particular on 16th March, 2007. On the aforesaid ground, the order of the Assessing Officer was upheld. 4. On further appeal, the Tribunal by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ship and, therefore, Apex Court's decision in S. A. Builders (supra) become inapplicable. 6. In the present facts, we find that the CIT(A) has in the impugned order rendered a finding of fact that there was trade transaction between the Respondent Assessee and its group concern - M/s. Suraj Diamonds Consultancy Pvt. Ltd. during the subject Assessment Year i.e. A. Y. 2007-08. Once the fact of business relationship between the Respondent Assessee and the group concern is established and accepted, then the amount advanced by the Respondent Assessee to its group concern would result in allowing of interest expenditure incurred by the Respondent-Assessee on the amount of loan borrowed by him. As observed by the Apex Court in S.A. Builders ..... X X X X Extracts X X X X X X X X Extracts X X X X
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