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TMI Blog2018 (6) TMI 1776X X X X Extracts X X X X X X X X Extracts X X X X ..... lso but on which interest has duly been charged by the assessee. CIT (A) has also placed reliance on the judgment of the Hon ble Apex Court in the case of S.A. Builders Ltd. [ 2006 (12) TMI 82 - SUPREME COURT ] wherein as held that an expenditure may not have been incurred under any legal objection but yet it is allowable as a business expenditure if it was incurred on the grounds of commercial expediency. We note that the Hon ble Apex Court has also observed that the expression commercial expediency is an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. CIT (A) has also referred to the judgment of Hon ble Delhi High Court in the case of CIT vs. Dalmia Cement (Pvt.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gement services and real estate development. The return was filed declaring a loss of ₹ 4,11,60,55,330/-. The case was selected for scrutiny under CASS. During the course of assessment proceedings, the AO noted that during the year the assessee had taken secured and unsecured loans aggregating to ₹ 16,13,53,80,970/- on which interest of ₹ 43,04,42,633/- had been paid. The AO also noted that there were investments and interest free loans and advances and capital work in progress which were financed from the borrowed funds whereas the assessee s fund, including share capital and reserve surplus, was ₹ 2,59,78,94,150/-. The AO was of the view that since the assessee had used borrowed funds for investments, capital wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order and supported the findings of the AO with respect to the disallowance u/s 36(1)(iii) of the Act. The Ld. Sr. Departmental Representative vehemently argued that the issue was not covered by the order of the ITAT in assessment year 2008-09 as facts have to be examined for each assessment year on a stand-alone basis. 4.1 With respect to the assessee s prayer for withdrawal of its appeal, she had no objection. 5. We have heard the rival submissions and have also perused the material on record. As far as the issue of disallowance of interest u/s 36(1)(iii) of the Act is concerned, we find that the Ld. CIT (A) has discussed the issue at length in paragraph 3.2 of the impugned order wherein he has given a categorical finding that the loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t.) Ltd. reported in 254 ITR 377 wherein it had been held by the Hon ble High Court that once it was established that there was a nexus between the expenditure and the purpose of business, the revenue cannot justifiably claim to put itself in the armchair of the businessman and take up the role to decide as to how much is reasonable expenditure having regard to the circumstances of the case. Thereafter, the Ld. CIT (A) has given a categorical finding that in the instant case the loans and advances have been given on account of commercial expediency. The Ld. Sr. Departmental Representative could not point out any factual inaccuracy in the findings of the Ld. CIT (A) nor could she point out how the impugned order was not legally sustainable. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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