Assessee, a partnership firm, engaged in the business of finance and investments, which had diverted interest-bearing funds, without charge of any interest, to its sister concerns, the Tribunal held that unless the money advanced to the sister concern could not be held to had been advanced for commercial expediency of the assessee, the interest paid thereon by the assessee could not be disallowed under section 36(1)(iii) of the Act. (AY.2015-16)
Dy. CIT v. Shriram Investments (2022)95 ITR 111 (Chennai)(Trib)
S. 36(1)(iii): Interest on borrowed capital-Advancing borrowed money to sister concern for business purposes without charging interest-Interest expenses allowable as deduction. [S. 37(1)]