2008 (9) TMI 1029

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..... The assessee claimed deduction of fund management charges amounting to Rs.2,32,79,128/- incurred by the assessee on the funds borrowed from M/s. Genesis Consultants Pvt. Ltd. amounting to 3. In first round the matter travelled upto Tribunal and was restored back to the file of Commissioner (Appeals) by Tribunal. In the second round Commissioner (Appeals) agreed with Assessing Officer that the expenditure by way of fund management charges was not incurred for earning dividend income but was incurred for having control over M/s. Core Healthcare Ltd. 4. After hearing the parties and considering the case law both in relation to claim u/s 57 (iii) of the Income-Tax Act, 1961 (the Act) and Section 36 (1) (iii) of the Act Tribunal allowed ....

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....interest on the loan taken by the assessee-company to M/s. Genesis Consultants P. Ltd. by way of fund management charges. M/s. Genesis Consultants P. Ltd. is a separate assessee and is being assessed separately. The interest paid by the assessee has duly been shown by M/s. Genesis Consultants P. Ltd., as its income. The assessee has claimed the deduction in respect of interest paid on the funds borrowed for investing in acquiring the shares of M/s. Core Healthcare Ltd., in the return u/s 57(iii) but during the course of assessment proceedings the assessee has taken alternative contention before the authorities below that in case the interest is not allowable u/s l57(iii), it should be allowed u/s 36(1)(iii). The case of the Revenue is that ....