2019 (1) TMI 473

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....2. Revenue relying on the assessment order and the order of the Commissioner of Income Tax (Appeals), ('CIT (Appeals)', for short) submits that business of the respondent-assessee was not set up and was not ready for commencement. Respondent-assessee was incorporated on 13th March, 2007 for the purpose of carrying out business of exploration, development and production of oil and gas. In furtherance of this objective, the respondent-assessee had entered into a business transfer agreement with M/s Jubilant Capital Private Limited and M/s Jubilant Securities Private Limited for acquiring their 20% and 35% participatory interest in Ankleshwar Block and Golaghat Block, respectively. However, due to formalities and want of approvals, actual tran....

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....interest @ 12% on the sum borrowed and had received interest @ 12.5 % on the money lent. M/s Jubilant Enpro Private Limited had repaid Rs. 50 crores between 28th May, 2010 to 25th June, 2010. Rs. 50 Crores was repaid was on the same day to M/s Jubilant Energy (Kharsang) Private Limited. 4. Respondent-assessee had relied on the cash flow statement, and cash and ledger account of advances which had opening balance of more than Rs. 6.85/-Crores as on 1st March, 2011, which amount it was stated was advanced to M/s Jubilant Capital Private Limited in the period relevant to the Assessment Year 2008-09. The amount advanced to M/s Jubilant Capital Private Limited was not from the funds procured by the respondent-assessee under the ICDs. 5. As....

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....versity in the factual and consequently in the legal finding. Accordingly, we do not think that the Assessing Officer and the First Appellate Authority were justified in not allowing deduction of the interest paid from interest received. 8. The Tribunal, after recording the above findings, had referred to the original business transfer agreement between the respondent-assessee and M/s Jubilant Capital Private Limited and M/s Jubilant Securities Private Limited. It was observed that the respondent-assessee had incurred expenses of more than Rs. 2,00,000/- on operations and support staff etc. The Tribunal has opined that the business had commenced as the respondent-assessee had entered into business transfer agreement dated 1st April, 2007....