https://www.taxtmi.com/caselaws?id=464374 The dominant issue was whether interest expenditure could be disallowed under s.36(1)(iii) on the ground that the assessee advanced borrowed funds to group concerns without charging corresponding interest and that "matching principles" required disallowance. The HC held that commercial expediency is primarily a factual/business decision of the assessee, and Revenue authorities cannot substitute their judgment on the interest rate or insist on matching when the assessee, an investment company following cash accounting, carries on borrowing and lending as its business; absent a finding that the arrangement was arbitrary or designed to defeat revenue, disallowance is impermissible. The court also treated the Tribunal's finding on commercial expediency as a pure finding of fact raising no substantial question of law under s.260A. The appeal was dismissed against the Revenue. en-us Mon, 18 Jul 2022 00:00:00 +0530 Tue, 30 Dec 2025 16:14:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=464374 The dominant issue was whether interest expenditure could be disallowed under s.36(1)(iii) on the ground that the assessee advanced borrowed funds to group concerns without charging corresponding interest and that "matching principles" required disallowance. The HC held that commercial expediency is primarily a factual/business decision of the assessee, and Revenue authorities cannot substitute their judgment on the interest rate or insist on matching when the assessee, an investment company following cash accounting, carries on borrowing and lending as its business; absent a finding that the arrangement was arbitrary or designed to defeat revenue, disallowance is impermissible. The court also treated the Tribunal's finding on commercial expediency as a pure finding of fact raising no substantial question of law under s.260A. The appeal was dismissed against the Revenue. Case-Laws Income Tax Mon, 18 Jul 2022 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=464374