TMI Blog2013 (1) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... vedy, Sr.DR ORDER R.K. Gupta, Judicial Member This appeal by the assessee is directed against the Order of the CIT(A)-XIV, Mumbai dated 14.5.2008 for the assessment year 2003-2004. 2. The assessee is objecting for not allowing the interest paid on borrowed money for the purpose of acquiring shares as allowable deduction under section 57(iii) of the Act in assessment year 2003-2004 where the dividend income was taxable during this year. 3. During the assessment proceedings, Assessing Officer noted that assessee has taken loans from M/s. Kothari Metals Alloys in earlier years at ₹ 46,12,514/-. These funds were invested in a company M/s. Kambare Chemicals (I) Pvt. Ltd. where the assessee was one of the Director. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st in the company and the object of the assessee was not to earn dividend. In support of his contention, reliance was placed by learned CIT(A) in the case of CIT v. Smt.Amritaben R. Shah [1999] 238 ITR 777. Accordingly, order of the Assessing Officer was confirmed. Now the assessee is in appeal before the Tribunal. 5. Learned Counsel for the assessee reiterated its contention raised before the lower authorities. Further reliance was placed on the latest decision of Bombay High Court in the case of CIT v. Srishti Securities (P.) Ltd. [2010] 321 ITR 498 and also on the decision of Hon'ble Supreme Court in the case of Vodafone International Holdings B.V. v. Union of India [2012] 341 ITR 1 relevant page 13 of Supreme Court. It was also s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36(1)(iii) and therefore, directed to delete the disallowance to the extent sustained by CIT(A). On an appeal by department, the Hon'ble Bombay High Court while dismissing the appeal held that object of the loan was irrelevant and the interest which was disallowed to the extent investment would have to be allowed. While holding so, the Hon'ble Bombay High Court has considered another decision of Bombay High Court in the case of CIT v. Lokhandwala Construction Inds. Ltd. [2003] 260 ITR 579and the decision of India Cements Ltd. v. CIT [1966] 60 ITR 52 (SC). Learned D.R. has stated that these decisions are not applicable on the facts of the present case. In our view, the decisions are very much applicable as the loan was taken for acq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panied the CGP share and cannot be dissected so as to be treated as transfer of controlling interest of Mauritian entities and then that of Indian entities and ultimately that of HEL. Thereafter, the Hon'ble Supreme Court has held that capital gain chargeable under section 45 and their computation is to be in accordance with the provisions that follow section 45 and there is no notion of indirect transfer in section 45. Meaning thereby, the Hon'ble Supreme Court has held that controlling interest cannot be said to be that any income offered explained is allowable or not allowable if they are not provided specifically on the statute. The ratio of this decision can be easily imported on the facts of the present case as acquiring of co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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