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TMI Blog2017 (9) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax [2015 (11) TMI 1314 - SUPREME COURT OF INDIA ] Advance to subsidiary pursuant to undertaking given to financial institution by the assessee to provide additional margin to subsidiary to meet working capital for meeting cash losses could not be disallowed as business expenditure. - Decided in favour of assessee - Tax Appeal No. 1166 of 2011 With Tax Appeal No. 538 of 2017 With Tax Appeal No. 539 of 2017 - - - Dated:- 28-8-2017 - MR. AKIL KURESHI AND MR. BIREN VAISHNAV, JJ. For The Appellant : Mr Km Parikh, Advocate For The Opponent : Mr Tej Shah, Advocate ORAL ORDER ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. In Tax Appeals No. 538 and 539 of 2017, the Revenue has disputed the judgement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which, the Revenue approached the Tribunal. The Tribunal noted that the sister concern Euphoric Laboratory Prvt Ltd. was exclusively making sales on behalf of the assessee in earlier year for which, it was also paid commission. During the period relevant to the assessment year, the sister concern could not recover the sales collection. The Assessing Officer, therefore, charged interest on the outstanding balance in the account of the assessee and added a sum to the return of income. The Tribunal confirmed the view of the CIT (Appeals) inter alia on the grounds that the sister concern, to whom the funds were transferred, was exclusively in promoting sales of the assessee's products. It is also continuously incurring losses and the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , who was acting as sales agent of the assessee and was otherwise in dire financial constraint. The Supreme Court in case of S.A.Builders Ltd vs. Commissioner of Income Tax (Appeals) amd anr (supra) had made following observations: 23. In our opinion, the decisions relating to Section 37 of the Act will also be applicable to Section 36(1)(iii) because in Section 37 also the expression used is for the purpose of business . It has been consistently held in decisions relating to Section 37 that the expression for the purpose of business includes expenditure voluntarily incurred for commercial expediency, and it is immaterial if a third party also benefits thereby. Thus in Atherton vs. British Insulated Helsby Cables Ltd (19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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