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TMI Blog2024 (8) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... sustained. Disallowance u/s 14A - As fairly concedes that the same is liable to be answered against the Revenue in light of the decision rendered in PCIT v. Era Infrastructure (India) Ltd. [ 2022 (7) TMI 1093 - DELHI HIGH COURT ] - HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV For the Appellant : Mr. Sunil Agarwal, Sr. SC with Mr. Shivansh B. Pandya, SC and Mr. Utkarsh Tiwari, Adv. For the Respondent Mr. Mayank Nagi and Mr. Tarun Singh, Advs. ORDER: CM APPL. 61111/2023 (Ex.) 1. Allowed, subject to all just exceptions. 2. The application is disposed of. CM APPL. 61110/2023 (Delay) 3. This is an application filed by the appellant seeking condonation of 44 days delay in filing the present appeal. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of Rs. 13 .89 crores and is added back to the returned income. 9. One of the other submissions, which was addressed by Mr. Agarwal was a failure on the part of the assessee to show that the wholly owned subsidiary was in the same line of business or would be said to qualify the prerequisites of the benefits which would flow from Section 36(1)(iii) of the Act. 10. Insofar as the last submission is concerned, we note that the aforesaid aspect was extensively spoken upon by the assessee as would be evident from the following discussion which appears in the order passed by the Commissioner of Income Tax (Appeals) [ CIT(A) ] dated 23 January 2017: 5.2 During the appellate proceedings, Ld. AR has filed written submissions. Main arguments of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... astructure Ltd. [2012] 21 taxmann.com 118 (Bom.) 5.3 Decision I have considered the Assessment Oder, written submission and oral argument of the Ld. AR carefully. I agree to the arguments of the Ld. AR that issue is covered by the rulings of Hon ble Supreme Court in the case of S.A. Builders cited supra. The relevant portion of ruling of Hon ble Supreme Court is reproduced as under:- In this connection we may refer to section 36 (1) (iii) of the Income-tax Act, 1961(hereinafter referred to as the Act ) which states that the amount of the interest paid in respect of capital borrowed for the purposes of the business or profession has to be allowed as a deduction in computing the Income-tax under section 28 of the Act. 20. In Madhav Prasad Jat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under any legal obligation, but yet it is allowable as a business expenditure, if it was incurred on grounds of commercial expediency. 34. We agree with the view taken by the Delhi High Court in CIT v. Dalmia Cement (Bharat) Ltd. [2002] 254 ITR 377 2 that once it is established that there was 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 hoard of directors anil 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 autho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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