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TMI Blog2012 (8) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... ) has wrongly interpreted and relied upon the decision of Hon’ble Supreme Court in the case of S.A. Builders Ltd. vs. CIT (2006 (12) TMI 82 - SUPREME COURT) which in fact goes against the assessee. In the facts and circumstances, the order of the Ld. CIT(A) is reversed and that of the A.O. is restored. Thus, all the grounds of the Revenue are allowed. - I.T.A. No. 414(Asr)/2010, I.T.A. No. 416(Asr)/2010 - - - Dated:- 7-8-2012 - SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER, JJ. For the Appellant: Sh. Tarsem Lal, DR For the Respondent: Sh. Sudhir Sehgal, Adv. ORDER PER BENCH ; These cross appeals of the assessee and the revenue arise from the order of the CIT(A), Jalandhar, dated 26.07.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,185/-. From the details of these advances, it is noticed that the assesse3e company has advanced ₹ 10,29,17,301/- to its family/sister concern M/s. Koklatta Hotel. This advance does not appear to be for business purposes as the assessee company has no business dealing with the company M/s. Kolkatta Hotel. No interest is charged from M/s. Kolkatta Hotel on this huge advance whereas the assessee has paid interest to banks amounting to ₹ 1,31,24,332/- on loans taken from various banks. Had the assessee not advance such a huge amount to its sister concern without charging any interest it would have been left with sufficient funds to refund the bank loans and the assessee would not have to pay interest amounting to ₹ 1,31,24,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed funds from this angle and they should have inquired as to whether the interest free loan was given to the sister company as a measure of commercial expediency and if it was, it should have been allowed. They further held that the expression commercial expediency was an expression of wide import and included such expenditure as a prudent businessman incurred for the purpose of business. The expenditure may not have been incurred under any legal obligation, but it was allowable if it was incurred on ground of commercial expediency. It was held that the High Court and the other authorities should have examined the purpose for which the assessee advance the money to its sister concern, and what the sister concern did with the money in ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant in its submission along with copy of balance sheet of Kolkatta Hotesl Ltd the AO has not commented adversely on the appellant s contention that the funds were used by Kolkatta Hotels Ltd. for the purpose of its business. That M/s. Kolkatta Hotels is a sister concern of the assessee company is accepted by the A.O. These facts indicate that the assessee company advanced some money to its sister concern which was used by the sister concern for the purpose of its business. I am, therefore, of the opinion that the advance was given by the company to M/s. Kolkatta Hotels Ltd. for the purpose of business of that company which, because of the fact that the other company was a sister concern in the same line of business, was on account of commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he point of view whether the amount was advanced for earning profits. Once it is established that there was nexus between the expenditure and purpose of the business, the Revenue cannot justifiable claim to put itself in the arm-chair of the businessman. No businessman can be compelled to maximize his profits. Mr. Tarsem Lal, Ld. DCIT(DR) further argued that that the assessee had advanced ₹ 10,29,17,301/- to M/s. Kolkatta Hotel, a sister concern of the assessee. No commercial expediency has been explained by the assessee either before the AO or before the ld. CIT(A). Therefore, in the facts and circumstances, the decision of the Hon ble Supreme Court in the case of S.A. Builders Ltd. vs. CIT 288 ITR 1 (SC), cannot be made applicable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (DR), Mr. Tarsem Lal, on the other hand argued that nothing has been placed on record how the said losses are allowable and therefore, this ground of the assessee should be dismissed, as rightly done by the ld. CIT(A) 10. We have heard the rival contentions and perused the facts of the case. We are convinced with the argument of the Ld. DCIT(DR), Mr. Tarsem Lal that nothing has been placed on record by the assessee before any of the authorities below with regard to earlier years losses and how they are allowable under law and therefore, the ld. CIT(A) has rightly dismissed the ground of the assessee. Thus, we do not find any infirmity in the order of the ld. CIT(A) and ground No.4 of the assessee is dismissed. 11. In the result, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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