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2012 (6) TMI 131 - AT - Income TaxRevision u/s 263 - Disallowance u/s 14A - expenditure towards interest paid/payable to ICICI Bank on the loan taken and utilised for the purpose of investment in shares in Andhra Pradesh Gas Power Co. Ltd. (APGPCL in short). - held that:- nce it established that there was nexus between the expenditure and the purpose of the business, the Revenue cannot justifiably claim to put itself in the armchair of the business man or in the position of the board of directors and assume the role to decide how much is reasonable expenditure having regard to the circumstances of the case. No business man can be compelled to maximise his profit. What is relevant is whether the amount was advanced as a measure of commercial expediency and not from the point of view of whether the amount was advanced for earning profit. The money which was borrowed by the assessee from ICICI Bank was utilised for the purpose of acquisition of shares of APGPCL for the purpose of business advantage and it cannot be considered as investment in relation to earning of income exempted from tax. The benefit derived by the assessee by this investment is more than interest incurred by the assessee towards loan from ICICI Bank. The investment in the shares by the assessee by borrowing money from ICICI Bank to be seen with saving of power cost. The assessee derived exorbitant benefit on the cost of power. Had the assessee not investment in the shares of APGPCL, the assessee should have incurred additional expenditure towards supply of power. - Decided in favor of the assessee
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