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2014 (12) TMI 520 - HC - Income TaxInterest paid on funds borrowed for purchase of shares deductible u/s 36(1)(iii) or not Legal and professional charges incurred for rehabilitation - Shares purchased of a BIFR Company Held that:- CIT(A) was of the view that the decision in Madhav Prasad Jatia v. CIT [1979 (4) TMI 2 - SUPREME Court] it was rightly held that at the time of allowing interest u/s 36 of the IT Act, 1961, three conditions are required to be seen for allowing deduction in respect of the borrowed funds for the purpose of business, i.e. Capital should be borrowed by the assessee, it must be borrowed for the purpose of business and interest must have been paid assessee company has fulfilled all the three conditions assessee has incurred interest expenditure in respect of unsecured loan taken from a body corporate and have been utilised for the purpose of acquisition of shares of India Polyfibres Ltd on which no dividend has been received - the expenditure relatable to such an investment is allowable business expenditure u/s 36(1)(iii) - However, the Tribunal, while considering the appeal has not given cogent reasons and has summarily allowed the appeal - since no details reasons are given by the Tribunal, thus, the matter is remitted back to the Tribunal for fresh consideration Decided in favour of assessee.
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