Supreme Court · 2006 INSC 1009 · Decided 14 December 2006
S.A. Builders LTD. v. Commissioner of Income Tax (Appeals) Chandigarh and ANR.
- Court
- Supreme Court of India
- Citation
- 2006 INSC 1009 · [2006] SUPP. 10 S.C.R. 1077
- Case number
- CIVIL APPEAL No. 5811/2006
- Decided
- 14 December 2006
- Bench
- S.B. SINHA, MARKANDEY KATJU (2-judge bench)
- Outcome
- Appeal(s) allowed
- Case type
- Civil
- Acts & sections cited
- Income Tax Act Section 36(i)(iii), 37
Headnote
Income Tax Act, 1961-Sections 36(i)(iii) and 37-Borrowed funds A B lent to sister concern without charging interest, for commercial expediency- C Held, interest paid on borrowed funds not disal/owable. Words and Phrases-Expression 'commercial expendiency'-Meaning of-Discussed. The question which the Tribunal and High Court was justified in disallowing interest on borrowed funds on the ground that the assessee transferred same to its sister concern without charging any interest. Allowing the appeals and remitting the matter to the Tribunal for fresh consideration, the Court. HELD: 1.
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