Interest disallowance justified for Interest-free loan to sister concern for non-commercial expediency

C.R. Auluck & Sons (P) Ltd. Vs ACIT (ITAT Chandigarh)

The basis for allowing an expenditure in the hands of the assessee is an expenditure incurred for the purpose of business. Applying the ratio of commercial expediency propounded by the Hon’ble Supreme Court in S.A. Builders Vs. CIT (Supra), we find that the intention of the assessee in advancing the said loan interest free to its sister concern is not for the purpose of business. The two concerns were carrying on independent lines of manufacturing and the produc

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