2018 (9) TMI 103

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.... 2,92,31,861/ - representing loss on Joint Venture in USA which was written off during the year by the appellant. 3. Briefly stated, the facts of the case are that the assessee company was formed with the object to carry on refining, manufacturing and dealing etc., petroleum and chemical products. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has written off the investment made by it in joint venture company in USA. T he assessee was asked to explain the write off and furnish the details of investment. The assessee furnished requisite details. On perusal of the details, the Assessing Officer found that the assessee has made investment in a joint venture company in the name of Global E....

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....atives thereof and to purchase or otherwise acquire invests and undergo joint ventures and to import, store, export, trade and deal in Petrochemicals and chemicals of all kinds, their products, by-Products and derivatives. ii) To purchase or otherwise acquire, manufacture, refine, treat, reduce, distil, blend, purify, pump, store, hold, transport, use experiment with market, distribute, exchange, supply sell and otherwise dispose of import, export and trade and generally deal in and all kinds of petroleum and petroleum products, oils and chemicals and any products, by-products and derivatives thereof. iii) To carry on all or any of the business of agents for sale, of dealers in and refiners of petroleum and chemicals and their products,....

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....ts necessary for that question are that the assessee is engaged in the business of manufacturing and trading of oral care products. In the course of the assessment proceedings, the Assessing Officer noted that the assessee claimed deduction on account of loss on sale of shares held in Camelot Investment Pvt. Ltd. ("Camelot", in short) amounting to Rs. 5,50,00,000. The assessee had made investment in 100 per cent owned subsidiary Camelot as claimed for purely business reasons. The stand of the assessee that the investment was made because and for the purposes of business, the loss on sale of such investment is required to be treated as business loss. The assessee placed reliance, inter alia, on a judgment of the hon'ble Supreme Court in ....

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....further business objectives and primarily related to the business operations of the assessee. At no point of time the investment in Camelot was made with an intention to realise any enhancement value thereof or to earn dividend income. The investment was made to separately house the integral part of the business activity. In such circumstances, the Commissioner relied upon the above judgments and allowed the appeal. He concluded that the loss of Rs. 5.50 crores is a business loss in the hands of the/assessee. He set aside the order of the Assessing Officer. 8. The Revenue carried the matter in appeal and the Tribunal has dealt with this issue extensively. In para 7 of its order, the Tribunal has upheld the conclusion of the Commissioner a....