2019 (3) TMI 60

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....OSE JOSEPH SC FOR INCOME TAX For The Respondent : ADVS. SRI. ANIL D. NAIR SRI. E. K. NANDAKUMAR (SR. ) SRI. K. JOHN MATHAI AND SRI. P. BENNY THOMAS JUDGMENT Vinod Chandran, J. The first question arising in the appeal is with respect to the liability of the assessee to interest tax on interest on debentures. The issue stands covered in favour of the assessee and against the Revenue by a....

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....ad engaged a broker to make investments in shares and securities, the assessee being a company engaged in the purchase and sale of securities. The assessee had advanced an amount of Rs. 1,30,00,000/- to the broker for the purpose of making investments on the assessee's behalf in the stock market. The advance was made on 25.10.1990. The broker made investments for the value of Rs. 1,20,00,000/-....

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....e stock market. The learned counsel would also rely on the decision of the Madras High Court in (2011) 339 ITR 391 (Mad) [Commissioner of Income Tax v. Integrated Finance Co. Ltd.]. 4. Having gone through the decision cited, we find that the assessee therein was also a finance company. However, the advance made was to a manufacturer of goods with whom the assessee had regular trading transactio....

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....trading activity between the assessee and the broker, it cannot be said to be a trading advance. The advance was made for making investments and after such investments were made what was retained with the broker was levied with interest by the assessee thus giving it the character of a loan. The assessee's intention at the time of advance is not at all relevant, since the character of the amou....