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2017 (11) TMI 1946 - AT - Income TaxRectification u/s 254 - Allowability of the interest on borrowed funds - investment in shares of subsidiary company - interest expenditure allowability u/s.36(1)(iii) - Tribunal considered the issue and gave findings [2016 (10) TMI 807 - ITAT HENNAI] as restored the matter to the file of ld. Assessing Officer for fresh consideration with certain directions - Tribunal on earlier occasion in its order, has given direction to ld. Assessing Officer to allow the expenditure u/s.36(1)(iii) of the Act, if the investment was made in subsidiary company for the purpose of acquiring controlling interest and acquisition of such controlling interest was of the business of the assessee - HELD THAT:- Decision of the Tribunal is binding on the AO and he cannot pick up a words or sentences from the Order of Tribunal, de hors the context or questions under consideration and construe it to be complete law declared by the Tribunal. When once the Tribunal decides the issue in one way, only course available to the AO is to follow the Order of Tribunal in full spirits, and it is not permissible to the AO to take a different view, or to sit in judgment over the Order of Tribunal by interpreting the same in the manner he wanted. The Tribunal on earlier occasion in its order, has given direction to ld. Assessing Officer to allow the expenditure u/s.36(1)(iii) of the Act, if the investment was made in subsidiary company for the purpose of acquiring controlling interest and acquisition of such controlling interest was of the business of the assessee and if it resulted in promote the business of the assessee as well as helpful to the assessee for having management control over said such subsidiary company, then the duty of the AO is to grant deduction u/s.36(1)(iii) of the Act, if it is fulfilled the condition laid down by the Tribunal. If the money was borrowed for the purpose of purchase of shares of subsidiary company, which is for the purpose of acquiring or maintaining controlling interest and acquisition/maintaining of such controlling interest was of the business of the assessee and if it is resulted in promotion of the business of assessee company as well as helpful to the assessee for having management control over such subsidiary company, then such interest expenditure should be allowed u/s.36(1)(iii) of the Act. If AO fails to properly understand or appreciate the direction to the Tribunal, then the assessee is at liberty to explore and pursue the remedies available under law at elsewhere, as the AO is duty bound to pass the consequential order in conformity with the Order of Tribunal cited supra and he has no discretion or choice or to overlook the Order of Tribunal. In the present case, the assessee has not pointed out any mistake in the Order of Tribunal cited supra which warrants rectification in terms of Sec.254(2) of the Act. In absence of any specific mistake which warrants any rectification within the scope of provisions of the section 254(2) of the Act, in the Order of Tribunal cited supra, there is no reason to recall the earlier Order of Tribunal, or to delete any part therein. The decision of Tribunal has not to be scrutinized sentence by sentence to find out whether all facts have been set out in detail by the Tribunal or whether some incidental fact, which appears on the record, has not been noticed by the Tribunal in its order, if the order of the Tribunal shows that it has, in fact, done so, there is no reason to interfere with the decision of the Tribunal vide provision of the section 254(2) of the Act and we make it clear that the AO shall pass the order in conformity with the Order of Tribunal. With this observation, we dispose off the Miscellaneous Petitions filed by the assessee.
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