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2021 (12) TMI 1407 - RAJASTHAN HIGH COURTAllowable Revenue expenses u/s 37 - Business loss on account of permanent diminution in the value of the investment made in the equity shares in one of the subsidiaries of the assessee in USA - According to the AO this loss was not allowable u/s 37 since the expenditure could not have been considered as a revenue expenditure - HELD THAT:- Tribunal relying on the decisions of the Supreme Court and High Courts noted that under similar circumstances the expenditure incurred by the company were allowed. This was on the basis that the assessee company in order to expand its business world wide had setup subsidiaries in other countries. The investment made in such companies was seen as revenue expenditure since the purpose behind making the investment was only for expansion of the business. Applying this logic to the assessee in the present case, the Tribunal was of the opinion that such investment being in the nature of revenue expenditure was to be allowed under Section 37 of the Act. Having perused the order passed by the AO and by the tribunal and having heard learned counsel for the revenue, we find no error in the view expressed by the tribunal. As noted, the assessee had made investment in its subsidiary company in order to expand its business with a view to earn higher profit. The investment was thus driven by business expediency. The tribunal therefore committed no error - No question of law arises.
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