TMI Blog2011 (12) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... in question. Lastly there are contradiction in the finding recorded by the Assessing Officer that involvement of the respondent in subsidiary company cannot be regarded as on account of business consideration.- Decided against the Revenue. - ITA 1250/2011 - - - Dated:- 9-12-2011 - MR. JUSTICE SANJIV KHANNA, MR. JUSTICE R.V.EASWAR, JJ. For Appellant: Mr. Kamal Sawhney, Adv. O R D E R This appeal by the Revenue under Section 260A of the Income Tax Act, 1961 (Act, for short) is directed against the order of the Income Tax Appellate Tribunal (for short, the tribunal) in the case of M/s Narang Industries Private Ltd. The appeal pertains to the assessment year 2003-04. 2. Several issues have been decided by the tribunal in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrolled the assessee company without changing the ground reality. Without de-facto changing the ground reality the assessee company had transferred its distillery business to its subsidiary company along with its existing employees. By passing a simple Board Room Resolution, the assessee company had not only claimed an interest liability of Rs.1,59,28,955/- but had also claimed deduction of Rs.65,62,103/- on account of provision for gratuity. In the following paragraphs this issue will be spelt out more elaborately. 4. CIT (Appeals), however, deleted the said addition. The aforesaid deletion has been upheld by the impugned order passed by the tribunal. 5. The facts noticed by the CIT (Appeals) and the tribunal, are that the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded by the appellate authorities that the respondent later on sold their share holding in Narang Distillery Ltd. for Rs.6,00,00,000/- during the assessment year 2004-05. After considering the said aspect, both the CIT (Appeals) and the tribunal have observed that there is no co-relation whatsoever between the utilization of the term loan and the credit facilities on which the respondent had paid finance charges and interest and the so called investments had been made by the respondent during the assessment year in question. The Assessing Officer while disallowing the said payment of interest and financial charges of Rs.1,59,28,955/-, had failed to notice and given due credence to the fact that in the preceding year the assessee had made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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