TMI Blog2022 (2) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... interest expenses. The facts of the present case are identical to the facts of the case as discussed in M/S. PHIL CORPORATION LTD., [ 2011 (6) TMI 187 - BOMBAY HIGH COURT] . Accordingly, we set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition made by him. Hence the ground of the appeal of the assessee is allowed. - ITA No. 410/AHD/2017 - - - Dated:- 1-2-2022 - Shri Waseem Ahmed, Accountant Member And Ms Suchitra Kamble, Judicial Member For the Assessee : Shri Manish Shah, A.R For the Revenue : Shri R.R. Makwana, Sr.D.R ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: 1. The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 14,57,943/- attributable to such interest free advances and disallowed the same by adding to the total income of the assessee. 5. Aggrieved assessee preferred an appeal to the Ld. CIT(A) who found that the assessee has made the investment by acquiring the shares of different companies out of the borrowed funds. As per the Ld. CIT(A) such investment was capable of generating the dividend income which is free from tax. Accordingly, he was of the view that such amount of interest cannot be allowed as deduction u/s 36(I)(iii) of the Act, rather the disallowance needs to be made under the provision of section 14A of the Act. Thus the Ld. CIT(A), dismissed the appeal filed by the assessee. 6. Being aggrieved by the order of the Ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was made by the assessee to have controlling interest in the companies. In this regard we find that the assessee during the assessment proceedings vide letter dated 04/12/2007 before the AO contended as under: Regarding loans granted by the assessee, the assessee company has given advances to five tooth brush companies as a business strategy to have controlling stake in their business and so that interest has not been charged on the same. 10.2 The above submission of the assessee has actually been translated in reality which is evident from the order of the Hon ble Gujarat High Court. All the aforesaid companies were amalgamated with the assessee. The relevant extract of the judgment of Hon ble Gujarat High Court is placed on pages ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected to sit in the chair of the assessee and to decide the business interest. The assessee is to watch its business interest well. Once it is established that there was nexus between the expenditure and purpose of the busienss (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 his profits. 10.4 We also note that the SLP filed against the above observation of Hon ble Bombay High court has been dismissed by the Hon ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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