TMI Blog2013 (5) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... ectors & though concluded that the Directors were interested in the assessee but the question whether such Directors, who have advanced loan to the assessee, are also the Directors, who are beneficiary of interest free loan from the assessee, has not been examined. The commercial expediency cannot be mere availing of interest free loan from one assessee and giving interest free loan to another - set aside the orders of the CIT(A) and Tribunal and redirect to examine the said question. - ITA No.225 of 2004 - - - Dated:- 7-5-2013 - Hemant Gupta And Ritu Bahri,JJ. For the Petitioner : Ms. Savita Saxena, Advocate, For the Respondent : M/s Akshay Bhan Aalok Mittal, Advocates, ORDER Hemant Gupta, J. The present appeal un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est. The amount due as on 31.03.1989 is almost equal to the amount of loans taken from the Bank. The Assessing Officer, thus, found that almost the same amount taken from the Banks on which interest was paid by the assessee was advanced to the Directors or sister concerns without charging any interest. The assessee is not a finance company and it is an industrial concern manufacturing soft drinks. Therefore, the amount of interest debited to the Profit Loss A/c was disallowed. In appeal, the learned Commissioner of Income Tax (Appeals) found that the assessee has borrowed interest free loan from the companies in which the Directors were interested to the extent of Rs.3,16,22,357/- and in case the assessee had charged the interest on its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit out of it. Accordingly, the assessee will not be entitled to claim deduction of the interest on the borrowings to the extent those are diverted to sister concerns or other persons without interest. Learned counsel for the Revenue also relied upon an order dated 14.10.2011 passed in ITA No.53 of 2003 titled Commissioner of Income Tax, Ludhiana Vs. M/s Varinder Agro Chemicals Ltd. to contend that the plea that loan was advanced to the sister concerns due to commercial expediency cannot be permitted to be raised in the present appeal for the first time. On the other hand, learned counsel for the assessee relies upon Supreme Court judgment reported as S.A.Builders Ltd. Vs. Commissioner of Income Tax (Appeals) another (2007) 288 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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