2019 (3) TMI 362

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....me is printed in the cause list, none appears for the respondent. 3. This Appeal has been admitted on the following Substantial Question of Law:- "1.Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in confirming the order of the Commissioner of Income Tax (Appeals) deleting the disallowance of interest on borrowed funds diverted for advancing interest-free loans to sister concerns of Rs. 1,69,84,787/- except on borrowed funds to the tune of Rs. 74,76,027/- holding that the amounts were covered under the expression "commercial expediency?" 4. The short issue which falls for consideration is whether the Tribunal was right in confirming the order passed by the Commissioner of....

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....to have been utilised for the purpose in the year 2002-03 and in assessment year 2004-05 in the investment in wholly owned subsidiary company." 7. The above submission made by the assessee was furnished by producing bank accounts of the company for the relevant assessment years to establish the deposit and withdrawal. Furthermore, the loan advanced by Shri Thakur Bakshani of Rs. 1,05,06,690/- was stated to be against the loan taken from the earlier to the extent of Rs. 3,00,00,000/- This was also substantiated by the assessee by producing accounts. Likewise, the assessment lying in the account of Supreme Art Works to the extent of Rs. 3,04,301/- was shown to be towards business expenses and the said party is a sundry debtor of the ....

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....d by the assessee was a business expediency. 10. The learned Standing Counsel would refer to the decision of the High Court of Kerala in Commissioner of Income-Tax, Cochin v. Alapatt Brothers [2016] 386 ITR 338 (Kerala) . In the said decision, the Division Bench held that the CIT(A) though referred to the judgment in S.A. Builders did not examine as to how the principles therein would apply to the facts of the case. However, as indicated by us in the preceding paragraphs, the Tribunal has recorded the facts to support its stand that the decision in S.A.Builders would aid the case of the assessee. The CIT(A) was also satisfied with the nature of the transaction and it would qualify as "business expediency". The learned Standing Counsel fu....