TaxTMI 
TaxTMI 
2024 (2) TMI 893
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....states the moratorium under Section 14 of the Insolvency and Bankruptcy Code ("IBC") is still in force. Mr. Suresh Kumar was also agreeable. 2. The following two substantial questions of law are proposed. In our view, both the questions are inter-connected. "6.1 Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was justified in upholding the decision of the Ld. CIT(A) in deleting the disallowance of Rs. 12,87,36,636/- out of the interest expenses claimed u/s 36(1)(iii) of the Income Tax Act, 1961, without appreciating the fact that the interest bearing funds were given to subsidiary company as interest free deposits in guise of share application money ? 6.2 Whether on the facts and in the circumsta....
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....nces mentioned above. Aggrieved by this order, assessee preferred an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. By an order dated 26th April 2013, the CIT(A) partly allowed the appeal. The CIT(A) deleted the disallowance of interest under Section 36(1)(iii) of the Act amounting to Rs. 12,87,36,636/- and the upfront fee of Rs. 1,25,00,000/-. Aggrieved by this order, Revenue preferred the appeal before the Income Tax Appellate Tribunal ("ITAT"). The ITAT dismissed the appeal by the impugned order pronounced on 31st May 2016 and it is this order which is challenged before us in this appeal. 5. It is the case of Revenue that interest bearing funds were given by assessee to its subsidiary as interest free deposits in the g....
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....elied on Reliance Communications Infrastructure Ltd. (2012) 207 Taxman 219. 6. The CIT (A) and the ITAT after considering the material on record and relying on the ratio of the three judgments relied upon by assessee came to a factual finding that amount of Rs. 500 Crores advanced as share application money by assessee to Videocon Telecommunications Ltd ("VTL") was for the purpose of assessee's business and in view thereof (a) disallowance of Rs. 12,87,36,636/- out of interest expenditure claimed by assessee under Section 36(1) (iii) of the Act was unwarranted and consequently, upfront fee of Rs. 1,25,00,000/- paid to the CBI in respect of the loan of Rs. 500 Crores was also to be allowed as deduction. The CIT(A) and the ITAT arrived at fi....