TMI Blog2014 (12) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... e had made interest payments to M/s. Arora Corporation and M/s. Rushabh Capital and Finance Ltd. - interest expenditure is allowable u/s 37(1) if the same is not covered by Section 36(1)(iii) and rightly held that the disallowance of interest expenditure to the extent by AO was bad in law and the Tribunal committed no error of law in confirming the order of the CIT(A) – Decided against revenue. - TAX APPEAL NO. 434 of 2006 TO TAX APPEAL NO. 435 of 2006 - - - Dated:- 14-11-2014 - MR KS JHAVERI AND MR. K.J.THAKER, JJ. FOR THE APPELLANT : MR PRANAV G DESAI, ADVOCATE FOR THE RESPONDENT : MR SN SOPARKAR, SR. ADVOCATE, MRS SWATI SOPARKAR, ADVOCATE JUDGEMENT Per: K S Jhaveri: 1. Since, the issue involved in both these a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y allowed the appeal of the assessee. Against the aforesaid order of the CIT(A), the appellant - revenue preferred appeals before the Tribunal, wherein, the Tribunal passed the impugned common order. Hence, the appellant-revenue preferred the present appeals, raising the following question of law for our consideration; Whether the Appellat Tribunal is right in law and on facts in confirming the order of the CIT(A) deleting the addition of ₹ 23,89,500/-/- made u/s.36(1)(iii) by the Assessing Officer on account of interest expenditure? 5. Mr. Desai, learned Advocate for the appellant-revenue, submitted that the CIT(A) as well as the Tribunal failed to appreciate the material on record in its proper perspective and erre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... written submissions made by the respondent-assessee, it clearly transpires that he was under contractual obligation to make payments to the companies in question and that the same formed part of the costs of purchase of shares. It is well settled position of law that interest paid for the debt incurred or paid as obligation under any agreement is allowable as expenditure. Section 36(iii) of the Act provides that the interest paid on capital borrowed for the purpose of business is allowable under the said section, whereas, Section 37(1) provides that all other kind of interest paid, except under Section 36(iii), are allowable under this section. It is an admitted position that the respondent assessee was dealing in shares and that he had ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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