TMI Blog2018 (10) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... e incongruities in the reasoning and calculations made by the Assessing Officer referred to in the order of the Commissioner of Income Tax (Appeals), which have been accepted by the Tribunal, the issue raised is covered against the Revenue by the decision of the Supreme Court in S.A. Builders Limited versus Commissioner of Income Tax and Another, (2006 (12) TMI 82 - SUPREME COURT) - decided against revenue - INCOME TAX APPEAL NO.1012/2018 - - - Dated:- 28-9-2018 - MR. SANJIV KHANNA AND MR. CHANDER SHEKHAR JJ. Appellant Through: Ms. Vibhooti, Advocate. Respondent Through: None SANJIV KHANNA, J. (ORAL) This appeal by the Revenue in the case of DLF Hotel Holding Limited ( respondent-assessee for short) arises from the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest paid 1,962.04 B. Total interest income 1,283.76 C. Net Interest paid (A-B) 678.28 D. Average investments 1,16,523.06 E. Total funds as per Books i.e. total of Balance 1,48,282.00 F. Net Interest allocated to average investment (C*D/E) i.e. addition for (sic) 533.01 4. Before the Commissioner of Income Tax (Appeals) it was pointed out by the respondent-assessee that one of the main objects for which the respondent-assessee was estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 37,948,027 2,452,596 2 DLF Aspinwal Hotels Pvt. Ltd. 401,690,735 26,002,425 3 Eila Builders Developers Pvt. Ltd. 157,558,675 9,348,803 4 DLF Cochin Hotels Pvt. Ltd. 202,659,463 13,121,097 5 DLF Hospitality Recreational Ltd. 370,210,816 18,188,789 (sic) DLF Sikkim Hotels Pvt. Ltd. - 1,151,697 6 DLF Comfort Hotels Pvt. Ltd. 136,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal observed that investment in subsidiaries/ joint venture companies was one of the main objects of the respondent-assessee and hence expenditure in the nature of interest incurred for the purpose of making investments cannot be disallowed under Section 36(1)(iii) of the Act. 7. Apart from the incongruities in the reasoning and calculations made by the Assessing Officer referred to in the order of the Commissioner of Income Tax (Appeals), which have been accepted by the Tribunal, the issue raised is covered against the Revenue by the decision of the Supreme Court in S.A. Builders Limited versus Commissioner of Income Tax and Another, (2007) 288 ITR 1 (SC) and in Munjal Sales Corporation versus Commissioner of Income Tax, (2008) 298 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities should have enquired as to whether the interest-free loan was given to the sister company (which is a subsidiary of the assessee) as a measure of commercial expediency, and if it was, it should have been allowed. 27. The expression commercial expediency is an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The expenditure may not have been incurred under any legal obligation, but yet it is allowable as a business expenditure if it was incurred on grounds of commercial expediency. XXX 37. We wish to make it clear that it is not our opinion that in every case interest on borrowed loan has to be allowed if the assessee advances it to a sister concer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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