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TMI Blog2016 (8) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... uded in favour of the assessee and against the Revenue. The Tribunal has rightly relied upon the decision of the Apex Court in the case of Munjal Sales Corporation (2008 (2) TMI 19 - Supreme Court ). It is borne out that the advances were either for commercial expediency given to its sister concern or the assessee was having surplus interest free funds. - Decided in favour of the assessee - TAX APPEAL NO. 73 of 2010 TO TAX APPEAL NO. 76 of 2010 - - - Dated:- 26-7-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MR NITIN K MEHTA, ADVOCATE FOR THE OPPONENT : MR B S SOPARKAR, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with the impugned judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Rs. In Lacs) Share Capital 3398.79 Reserves Surplus (Share premium, Capital reserve, Capital redeem reserve etc.) 31218.54 Total 34617.33 (Rs. In Lacs) Gross investment in fixed assets 97202.22 Inventories 3422.24 Receivables 10009.15 Total 110633.61 4.1 The Assessing Officer in para 6 of the assessment order has further observed as under: ... As shown above, above advances have been tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income Tax vs. Raghuvir Synthetics Ltd. reported in [2013] 354 ITR 222 (Guj) . 6. Having heard Mr. Mehta, learned advocate appearing on behalf of the Department and Mr. Soparkar, learned Senior Advocate appearing on behalf of the assessee and the question posed for consideration by us we are of the opinion that the Tribunal has not committed any error in deleting the addition made on account of disallowance of interest relating to the borrowed funds which is diverted to the sister concern without charging interest. In the case of Raghuvir Synthetics Ltd. (supra) , this Court has held as under: We may refer to the judgment of Apex Court at this stage given in case of S.A.Builders Ltd. v. Commissioner of Income Tax (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nexus between the expenditure and the purpose of the business (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 its profit. The Income Tax Authorities must put themselves in the shoes of the assessee and see how a prudent businessman would act. The authorities must not look at the matter from their own viewpoint but that of a prudent businessman. As already stated above, we have to see the transfer of the borrowed funds to a sister conce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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