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TMI Blog2019 (4) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... t which would yield income in form of dividend and therefore, investment was made for the purpose of earning income. Accordingly, CIT (Appeals) and the Tribunal were of the opinion that the expenditure incurred for earning such income had to be allowed under Section 36(1)(iii) of the Act. We do not find any error in such view. No question of law arises. Disallowance of expenditure u/s 37(1) - HELD THAT:- Tribunal while upholding the decision of CIT (Appeals) held that while making advances to the sister concerns, the assessee was acting in the normal course of business and that the interest expenditure was therefore allowable as per Section 36(1)(iii) of the Act. It was recorded that the Assessing Officer had not brought anything to prove t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication money given by the assessee to its sister concerns without properly appreciating the factual and legal matrix of the case? (2) Whether on the facts and circumstances of the case and in law, the ITAT was correct in dismissing the revenue's appeal in respect of the addition of ₹ 3,05,50,685/u/ s 37(1) on account of interest free advances without appreciating that the addition was not made on the notional basis on the loans advanced but has restricted the interest expenses to the extent of interest foregone and thus, the CIT (A) and the ITAT has ignored the facts of the case to the extent of perversity? (3) Whether on the facts and circumstances of the case and in law, the ITAT was correct in reversing the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of law arises. 3. Second question relates to the addition of ₹ 3.05 crores made by the Assessing Officer while disallowing expenditure under Section 37(1) of the Act. In this respect, the Tribunal while upholding the decision of CIT (Appeals) held that while making advances to the sister concerns, the assessee was acting in the normal course of business and that the interest expenditure was therefore allowable as per Section 36(1)(iii) of the Act. It was recorded that the Assessing Officer had not brought anything to prove that the expenditure incurred towards interest was not wholly and exclusively for carrying out the business of the assessee. The Tribunal therefore, confirmed the order of the CIT (Appeals). When CIT(Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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