TMI Blog2019 (12) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... private limited company and is engaged in the business of financing. During the scrutiny assessment of the assessee's return for the assessment year 2008-09, AO noticed that the assessee had claimed expenditure of interest paid on borrowed funds. The assessee had also funded its sister concern without charging interest. AO therefore disallowed the interest expenditure. The issue eventually rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration: i) Whether on the facts and circumstances of the case and in law, the ITAT erred in not upholding the decision of the learned CIT (A) in allowing assessee s claim for deduction of interest on borrowed fund when the same is utilised to give interest free loan/share application money to subsidiary companies? 2. We notice that a similar issue had come up for ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in case of S.A. Builders Ltd. Vs. CIT 288 ITR 1 (SC) and concluded as under: - If the aforesaid ratio laid down by Hon ble Apex Court is analyzed by keeping the same in juxtaposition with the facts of the present appeal, firstly, we find that there is no finding by the Assessing Officer that the funds were not utilized for business purposes and secondly, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture having regard to the circumstances of the case. No businessman can be compelled to maximize his profits. 3. We do not find any error in view of the Tribunal. The entire issue is quarely covered in favour of the assessee in case of S.A. Builders Ltd. (supra). The Tribunal correctly held that the assessee s decision to fund its subsidiaries driven by business exigency. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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