TaxTMI 
TaxTMI 
2022 (6) TMI 72
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.... proceedings, the Assessing Officer noticed that the Assessee had claimed interest of Rs.1,32,44,471/- in its P & L account, on which the Assessee was asked to justify the said claim and finally, the Assessing Officer disallowed the said amount of interest mainly on the reason that the Assessee has used the loan amount to make investment in shares and securities from which earning dividend income or capital gains. 2.1 The Assessee being aggrieved, preferred first appeal before the ld. Commissioner, who vide order impugned, affirmed the addition under challenge by concluding as under: "4.2 I have perused the facts of the case and the submission made by the AR. It .is noted from the bank statement furnished by the AR that the appellant had taken loan of Rs. 15-crores from M/s GE Capital Services India on 12.12.2001 and this amount was invested in Zero Coupon Fully Convertible Non- Marketable Transferable Bonds of Rs. 100 each to APJ Financial Services Private Limited (Rs. 11 crores) and Provestment Securities Private Limited (Rs. 4 crores) on 13.12.2001. It is contended that the said investment was not made in tax free securities and it was utilized for the purposes of the busines....
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....itigations including litigation arising out of the Income-tax Act and an earlier decision on the same question cannot be reopened if that decision is not arbitrary or perverse, if it had been arrived at after due inquiry, if no fresh facts are placed before the Tribunal giving the later decision, and if the Tribunal giving the earlier decision has taken into consideration all material evidence. Reference is also made to the decision of the Apex Court in the case of Parashuram Pottery Works Ltd. v. Income Tax Officer, [1977] 106 ITR 1 (SC)in which it was held: "We are aware of the fact that strictly speaking res judicata does not apply to income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year hut where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to .allow the position to be changed in a subsequent year. "On these reasonings in the absence of any material change justifying the Revenue to take a different view of th....
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....rial available on record. The issue in the instant case relates to the disallowance of interest of Rs. 1,32,44,471/- claimed by the Assessee on the loan amount taken for making investment in shares and securities. The said amount of interest was disallowed by the Assessing Officer and affirmed by the Ld. Commissioner more or less on the reason that the loan money was utilized to make investment in shares, from which the Assessee earned dividend income or capital gains. 4.1 The Assessee has claimed that the loan was taken in F.Y. 2001-02 and the same has been used for making investments and the interest on the loan has already been allowed by the Assessing Officer in the two preceding assessment years 2002-03 and 2003-04 and therefore, by principle of res judicata, the Assessee is entitled to get the same benefit as already given in the previous assessment years. 5.1 Further, the Assessee has also claimed that the said investment was not made in tax free securities and in fact, the same was utilized for the purposes of business. 5.2 The Assessee before us also relied upon the judgment passed by jurisdictional High court in the case of EicherGoodearth Ltd. vs. CIT (2015) 60 taxman....
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....clared by the Supreme Court in such cases is that if the expenditure is incurred for the purpose of promotion of business- more specifically as in the facts of this case to retain control or as part of a strategic investment of the assessee/company, such expenses - by way of interest outgo would have to be treated under Section 36(1) (iii) and not under Section 57. The matter is, therefore, remitted to the AO for full appraisal of the fact situation and findings in the light of our conclusions. If, as a result of the A.O's determination, it is found that such expenditure is incurred, the net expenditure is obviously to be taken into consideration under Section 80M of the Act in the facts of the present case. 11. The appeal is partly allowed to the above extent." 5.3 The Hon'ble Tribunal at Mumbai in the case of ACIT vs. M/s. Tata Sons Ltd. (ITA No. 4041/mum/2007 decided on 05.05.2021) also dealt with the identical issue and held as under: "10.5 Proceeding further, going by the factual matrix as enumerated in the preceding paragraphs, it is undisputed fact that the assessee was principal holding company for its various group entities. The object of investment in group concerns ....