https://www.taxtmi.com/caselaws?id=267533 The HC held that disallowance of interest paid to banks under Section 36(1)(iii) is not mandatory if the interest-free loan advanced to a sister concern is commercially expedient. The AO's finding that the advance was not for business purposes due to no direct dealings was erroneous. Commercial expediency exists even without direct transactions if the advance benefits the lender, such as improving the sister concern's financial health. The court ruled that a positive tangible benefit is not necessary; an advance made with a commercially expedient view suffices. The HC allowed the deduction under Section 36(1)(iii), set aside the Tribunal's order, and decided in favor of the assessee. en-us Fri, 24 Jul 2015 00:00:00 +0530 Fri, 25 Jul 2025 13:22:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=267533 The HC held that disallowance of interest paid to banks under Section 36(1)(iii) is not mandatory if the interest-free loan advanced to a sister concern is commercially expedient. The AO's finding that the advance was not for business purposes due to no direct dealings was erroneous. Commercial expediency exists even without direct transactions if the advance benefits the lender, such as improving the sister concern's financial health. The court ruled that a positive tangible benefit is not necessary; an advance made with a commercially expedient view suffices. The HC allowed the deduction under Section 36(1)(iii), set aside the Tribunal's order, and decided in favor of the assessee. Case-Laws Income Tax Fri, 24 Jul 2015 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=267533