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TMI Blog2013 (12) TMI 1600X X X X Extracts X X X X X X X X Extracts X X X X ..... 263 of the Income-tax Act dated 20-02-2009, that the assessee had claimed interest of Rs. 5,29,72,918/- payable on the loans taken on a sum of Rs. 27,29,01,157/- and Rs. 6,00,00,000/- by way secured loan and unsecured loan respectively. Since the assessee had given interest-free advance of Rs. 12,69,21,989/- to its subsidiary company, namely, Renowned Auto Products Manufacturers Ltd., wherein the assessee had 83% share, the Commissioner held that the interest was not allowable under Section 36(1)(iii) to the extent the borrowed funds not utilised for the purpose of business. Pointing out that the Assessing Officer had not examined the transaction of the assessee with Renowned Auto Products Manufacturers Ltd. and whether the loan advanced wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Officer to examine whether the assessee had satisfied the test of commercial expediency. Aggrieved by this, the assessee went on appeal before the Tribunal. 5. Pointing out that for the purpose of invoking jurisdiction under Section 263 of the Income Tax, the Commissioner has to have some material to enable him to form a prima facie view that the order passed by the Officer was erroneous and was prejudicial to the interest of the Revenue, the Tribunal held that the case on hand did not satisfy the twin conditions. The view of the Commissioner that the lending of the money to the sister concern was not on account of commercial expediency, but only to divert funds was however negatived by the Tribunal by pointing out to the rehabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter, the loan was given to the sister concern. He further pointed out that the sister concern is also in the same line of business as that of the assessee-company in manufacturing shock absorbers. Thus, as a commercial proposition, to extend its business, the assessee had purchased 83% of shares in the sick company - sister concern and the assessee had advanced money to bail the sick company out of its financial difficulties to advance its business purpose. Thus, there are no merits in the Tax Case Appeal. 8. Heard learned Standing Counsel appearing for the appellant and the learned counsel appearing for the Revenue and considered the material placed on record. 9. In order to find out whether the issue on the amount given to the sister c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the question as to whether there was any commercial expediency on the loan given by the assessee to the sister concern was not considered at all by the Assessing Officer, no exception could be taken to the exercise of jurisdiction of the Commissioner of Income Tax (Appeals) under Section 263 of the Act. Consequently, we agree with the Revenue on this aspect. 11. However, on merits, on the basis of materials, once the Tribunal had come to the conclusion that the loan advanced was on account of commercial expediency as well as in the orders of the BIFR, we do not find any ground to disturb the said finding. Rightly, the Revenue had not raised any question of law on this. Even though on the aspect of jurisdiction, the Revenue succeeds, yet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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