Allowing the petition the Court held that the loan had been given to sister concern or associate concern of assessee as a measure of commercial expediency by using borrowed funds, interest on such borrowed funds was to be allowed as deduction under section 36(1)(iii) of the Act. Reassessment notice and order disposing the objection is quashed and set aside. Referred, S.A. Builders Ltd. v. CIT (Appeals) [2007] 158 Taxman 74/288 ITR 1 (SC), Prashant S. Joshi v. ITO [2010] 189 Taxman 1/324 ITR 154 (Bom)(HC) (AY. 2009-10)
Vaman Prestressing Co. (P.) Ltd. v. ACIT (2023) 295 Taxman 252/(2024) 461 ITR 192 (Bom.)(HC)
S. 147 : Reassessment-With in four years-Interest on borrowed capital-Advance of amount to sister concern and associate concerns without charging interests-Commercial expediency-Notice and order disposing the objection is quashed and set aside. [S. 36(1)(iii), 148, Art. 226]