The Bombay High Court, in a decisive ruling, upheld the allowability of business expenditure incurred by Mahindra & Mahindra Ltd. in supporting its distressed subsidiary. The Court reaffirmed that commercial expediency justifies such deductions under Sections 28 and 37 of the Income-tax Act, 1961. It also clarified that the Assessing Officer has limited jurisdiction under Section 115J, reinforcing the sanctity of audited financials prepared under the Companies Act.
