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2015 (5) TMI 685 - HC - Income TaxExpenditure under Section 36 (1) (iii) - whether was not linked to earning of dividend income? Entitlment to deduction under Section 80M in respect of net dividend and not gross dividend - Held that:- This Court, therefore, is of the opinion that the law as declared by the Supreme Court in Cocanada Radhaswami Bank and United Commercial Bank [1965 (4) TMI 11 - SUPREME Court], Western States Trading (P) Ltd. v. CIT [1971 (1) TMI 11 - SUPREME Court] and Brooke Bond & Co. Ltd. v. CIT [1986 (9) TMI 2 - SUPREME Court] in such cases is that if the expenditure is incurred for the purpose of promotion of business- more specifically as in the facts of this case to retain control or as part of a strategic investment of the assessee/company, such expenses – by way of interest outgo would have to be treated under Section 36 (1) (iii) and not under Section 57. The matter is, therefore, remitted to the AO for full appraisal of the fact situation and findings in the light of our conclusions. If, as a result of the AO’s determination, it is found that such expenditure is incurred, the net expenditure is obviously to be taken into consideration under Section 80M of the Act in the facts of the present case. - Decided in favour of assesse for statistical purposes.
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