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2006 (9) TMI 141 - HC - Income TaxInterest on debentures and intercorporate dividends - treated as an asset or an advantage for the enduring benefit of the business? - non issuance of notice u/s 251(2) - HELD THAT:- The finding of the CIT(A) that it is not clear in the assessment order as to how the expenditure which had been capitalised in the books of account and claimed in the adjustment statement has been allowed by the Assessing Officer and that the said aspect also needs to be re-examined, certainly leads to the conclusion that there may be an enhancement of assessment or a penalty or reduction of the amount of refund. If that be so, as contemplated u/s 251(2) of the Act, the CIT(A), as rightly held by the Tribunal, should not exercise the power conferred u/s 251(2) without giving a reasonable opportunity to the assessee showing against such enhancement or reduction, and to that extent the Tribunal is right in coming to the conclusion that the CIT(A) has committed an error in rendering the finding that it is not clear in the assessment order as to how the expenditure which had been capitalised in the books of account and claimed in the adjustment statement has been allowed by the Assessing Officer. In any event, it is a settled law vide India Cements Ltd. v. CIT [1965 (12) TMI 22 - SUPREME COURT] that the loan obtained was not an asset or an advantage for the enduring benefit of the business of the assessee. Applying the said principle, we find that interest on debentures and corporate borrowings also cannot be treated as an asset or an advantage for the enduring benefit of the business of the assessee and accordingly confirm the order of the Tribunal. In the result, finding no substantial question of law, this appeal is dismissed.
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