2011 (11) TMI 818

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....ed by the Revenue challenging the order of the Income Tax Appellate Tribunal ( "the Tribunal" for short) dated 7.5.2010 proposing the following question of law for our consideration:- "Whether the Appellate Tribunal is right in law and on facts in deleting the disallowance of ₹ 43,05,000/- made out of interest expenditure on the interest-bearing funds diverted by the assessee-company to no....

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....of the provisions of Section 14A of the Income Tax Act. 3. This was challenged by the assessee before CIT(Appeals), which set aside the order of the Assessing Officer and allowed the appeal by giving its own detailed findings. 4. Department challenged this order of CIT(Appeals) before the Tribunal, which dismissed the appeal vide order dated 7.5.2010. Hence, the impugned order is challenged by t....

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....in the shares was out of the funds of the assessee only and the same was not out of the borrowed funds utilized either for giving interest free loans or for non-business purposes. The Tribunal also noted that no nexus that could be proved by the Assessing Officer between the borrowed funds and the investment. It also based its findings further on the decision of the Apex Court given in the case of....

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....commercial expediency. Decisions relating to section 37 will also be applicable to section 36(1)(iii) because in section 37 also the expression used is " for the purpose of the business". "For the purpose of business" includes expenditure voluntarily incurred for commercial expediency, and it is immaterial if a third party also benefits thereby." 6. The Tribunal also sought to rely upon the decis....