TaxTMI 
TaxTMI 
2017 (1) TMI 393
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....hs. The Assessing Officer (A.O.)completed the assessment on 14.3.2014 u/s. 143(3) of the Act, determining its income at Rs. 42.74 lakhs. 2.First Ground of appeal is about disallowance of interest of Rs. 18.14 lakhs on loan taken from SIDBI. During the course of hearing before us, the Departmental Representative(DR) stated that while deciding the appeal for the AY.2007-08(ITA/4195/Mum/2010, dated 31.1. 2012), the Tribunal had decided the issue against the assessee. We would like to reproduce the operative part of the order of the Tribunal and same reads as under :- 9. We have considered the rival submissions, perused the record and gone through the orders of the authorities below as well as decisions cited. The question for considerati....
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....lso given interest free loans to its sister concern Sameera Electronics Pvt. Ltd. The assessee in one of its submissions before us stated that nobody is interested in acquiring shares in Sameera because it is a loss making company. When the Sameera Electronics Pvt. Ltd. is loss making company where assessee is also having interest, we are unable to understand that what is the necessity of acquiring the shares in Sameera to effective control in that company. It is a fact that the assessee has entered into a separate agreement with M/s Sameera Electronics Pvt. Ltd. for utilization of premises and rent was also paid. When the assessee has paid charges for using of the premises, it cannot be said that the shares acquired by the assessee is for ....
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....Vs. JCIT order dated 11/11/2005 wherein the Tribunal has held as under:- "11. Rival submissions of the parties have been considered carefully. The question for consideration I whether interest paid by the assessee on the borrowings for acquisition of shares of Trumac can be allowed as deduction u/s 36(1)(iii) considering the facts of the case and case law available on this point. There is no dispute between the parties that deduction is allowable if money is borrowed for the purpose of business. The expression for the purpose of business is much wider than the expression for the purpose of earning profits' as held by Hon'ble Supreme Court in the case of India Cements Ltd., 60 ITR 52. Thus, for the purpose of allowing deduction u/s ....
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....are purchased by outsiders then there is possibility that outsider may jeopardize th business interest of assessee company. Therfore, in our opinion, act of borrowing money for the acquisition of shares was closely connected with or incidental to the carrying on the business. Consequently, the conditions of allowing deduction u/s 36(1)(iii) stood satisfied. The assessee also relied on the CIT Vs. Rajeev Lochan Kanoria (supra) wherein the Court has held as under:- "Held, that directorship is nothing but a vocation. The assessee was admittedly a director of several controlled companies. The activity of controlling, managing, administering and financing companies is nothing but a business/professional/vocational activity. A busines....
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.... explanation was not satisfactory. For making further verification of the outstanding liability he issued notice u/s. 133(6) of the Act to T&C to file a copy of the ledger account of the assessee in their books of accounts. It was found that the outstanding balance of the assessee company in the books of account of T&C was shown at Rs. 6.58 lakhs. Since there was difference in balance of both the parties so the AO supplied a copy of ledger account of T&C of the assessee and asked it to reconcile with the corroborative documentary evidences.The assessee filed its reply on 05.3.2014 . 4. After considering the same, the AO held that the outstanding balance in the books of account of the assessee company was shown at Rs. 13.73 lakhs, that th....