2009 (12) TMI 369

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....livered by K. L. Manjunath J.- The Revenue has come up in this appeal challenging the legality and correctness of the order dated October 7, 2008, passed by the Income-tax Appellate Tribunal Bangalore in I. T. A. No. 1012/BNG/2007 raising the following substantial questions of law : "1. Whether the Tribunal was correct in holding that interest pay-able of a sum Rs. 37,45,042 to the directors....

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....ome of the directors of the company, the company had purchased an immovable property in order to put up a hotel building. The project could not be materialized on account of various reasons. Ultimately, the company sold the property and while filing the return for computation of the capital gain the company claimed a sum of Rs. 37,45,042 towards interest paid to the directors on the loan borrowed ....

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....ed counsel for the Revenue. The main contention of the learned counsel for the Revenue is that after selling the property a resolution is passed by the company to pay the interest to the directors. In view of such resolution, there was no liability of the company to pay the interest as on the date of sale. In the circumstances the Tribunal has committed a serious error in granting the relief to....