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2013 (10) TMI 1122 - AT - Income TaxExpenditure in relation to demerger - Whether expenditure, being related to pharma division and specifically agreed upon, is allowable as deduction u/s.37 – Held that:- The assets and liabilities of that pharma division, which was transferred, did not contain the OFCD. Meaning thereby, in a situation when an asset and the connected liability in demerger is not transferred by the Demerged Company to a Resulting Company then naturally the Resulting Company shall not in any way be concerned about that asset, so even can not claim expenditure. On account of these facts, it is held that the premium on redemption of debenture was not the liability of the assessee. Hence, it was wrongly claimed for year under consideration. The provision of Section 37(1) are unambiguous that an expenditure is allowable only if the expenditure is laid out or expanded wholly and exclusively for the purpose of business of the assessee - Alleged expenditure in question did not pertain or relate to the assessee – Decided against the Assessee.
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