2011 (8) TMI 1325

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....S.N. Inamdar, senior Advocate with Miuhir Naniwadekar P. C. :- 1. Whether the ITAT was justified in holding that the loss of Rs. 72,99,996/- incurred by the respondent-assessee was allowable as a business loss under Section 37 of the Income Tax Act, 1961, is the question raised in this appeal. 2. The assessment year involved herein is AY 1997-98. 3. On 22nd February, 1995 the assessee ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....and Plastics (India) Ltd. was Rs. 14/- per share. The assessee for commercial reasons thought it fit not to subscribe to the shares offered by the company, as a result thereof Tainwala Chemicals and Plastics (India) Ltd. forfeited the amount of Rs. 72,99,996/- invested by the assessee company in the naked convertible warrants. 4. In the return of income filed for AY 1997-98, the assessee claime....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rder passed by this Court on 1/4/2009 and restored the appeal with a direction to reconsider the question as regards the financial position of Tainwala Chemicals and Plastics (India) Ltd. on the date of investment and whether the assessee made investments knowing fully well the vulnerable financial position of Tainwala Chemicals & Plastics (India) Limited. Accordingly, the matter is heard afresh. ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....or of the assessee company, it is seen that the profits of Tainwala Chemicals and Plastics (India) Ltd. for the year ending 31st March, 1995 were Rs. 4.02 crores and dividend of 25% was declared by the company in September, 1995. Net profit of the said company before the depreciation for the year 31st March, 1996 was Rs. 3.07 crores on a turnover of Rs. 42.20 lakhs as against Rs. 27.62 lakhs in th....