https://www.taxtmi.com/caselaws?id=235648 Gujarat HC upheld the Tribunal's decision allowing interest deduction on borrowed funds despite the assessee providing interest-free loans to associate concerns. The court held that once nexus between expenditure and business purpose is established, revenue cannot substitute its judgment for business decisions. Following CIT v. Dalmia Cement, the court applied the commercial expediency test, ruling that lending to subsidiary companies constitutes valid business practice. The disallowance by AO was properly deleted by CIT (Appeals). en-us Mon, 05 Dec 2011 00:00:00 +0530 Tue, 03 Jun 2025 17:01:36 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=235648 Gujarat HC upheld the Tribunal's decision allowing interest deduction on borrowed funds despite the assessee providing interest-free loans to associate concerns. The court held that once nexus between expenditure and business purpose is established, revenue cannot substitute its judgment for business decisions. Following CIT v. Dalmia Cement, the court applied the commercial expediency test, ruling that lending to subsidiary companies constitutes valid business practice. The disallowance by AO was properly deleted by CIT (Appeals). Case-Laws Income Tax Mon, 05 Dec 2011 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=235648