TaxTMI 
TaxTMI 
2014 (5) TMI 1104
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....nnouncing date in the open court. Even on that date none appeared on behalf of the assessee, therefore, I proceed to dispose of the appeal ex-parte, qua the assessee. 4. Facts in short are that the assessee is engaged in the business of exhibiting cinema slides and short films in theatres and also in allied activity i.e., outdoor advertising. During the previous year relevant to A.Y. 2007-08, the assessee-firm received income of Rs. 26.34 lakhs referable to hoarding sites given to its sister concern M/s. Creation Publicity Pvt. Limited. Against the same the assessee claimed various expenditure such as license fees, hoarding expenses, rent for hoarding site, interest to others etc. We are concerned herein with the interest of Rs. 6.37 lakhs....
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....that the said company has a total turnover of Rs. 26.24 crores out of which there were debtors outstanding to the tune of Rs. 20.59 crores which is nearly 78.46%. Since assessee's entire revenue related to the said party there was no alternative but to allow credit to the company. It was also brought to the notice of the Assessing Officer that the outstanding of the said company has decreased from the preceding year. 5. The Assessing Officer was not convinced with the explanation. He observed that the assessee has taken loans from 57 parties ranging from Rs. 25,000/- to Rs. 3 lakhs whereas, tax was deducted at source only on an amount of Rs. 54,000/- as against total interest payment of Rs. 6.37 lakhs. The Assessing Officer further ....
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....opinion decision of Hon'ble Apex Court in the case of S.A. Builders Ltd., is of no assistance to the assessee in the peculiar factual matrix of the case. It deserves to be noticed here that Hon'ble Apex court in the case of S.A. Builders Ltd. (288 ITR 1) observed that so long as there is nexus between the expenditure and the purpose of the business, the Revenue cannot justifiably claim to put itself in the arm-chair of the businessman and assume the role to decide how much is reasonable expenditure having regard to the circumstances of the case. In otherwords, once it is established that the funds were borrowed for the purpose of business no disallowance can be made out of the interest paid by the assessee. 7. Before me learned De....