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TMI Blog2012 (6) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... company registered under the Companies Act, 1956 and had claimed deduction under Section 36(1)(iii) of the Act in respect of the amount paid by way of interest on the amount borrowed from financial institutions, which amount had been invested in securing shares of two other companies by names M/s BPL Mobile Communication Ltd., and BPL Cellular Ltd. Investment in these two companies to the extent of 74% and 51% respectively had also made these two companies as subsidiaries of the assessee company. 3. The assessee had offered its income and the assessing officer had treated that as income from other sources. However, in so far as the interest paid on the borrowing utilized for purchasing shares of the two companies, the assessee had claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether the interest paid on borrowed capital not utilized for business but diverted for investment in the shares of subsidiary companies even though to acquire control over the companies and also to earn dividend could be treated as expenditure incurred for the purpose of business and allowable u/s. 36(1)(iii) of the Act? 7. We have been taken through the order of the tribunal and the order of the appellate commissioner as also the original order by Sri E R Indrakumar, learned senior counsel appearing for the appellant revenue. A perusal of the order does not satisfy us that the tribunal has recorded relevant and necessary findings of facts to apply any legal principle to the fact situation, particularly about the deduction claimed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee and as to how the activity constituted a business activity and the borrowing also constituted an investment, which is in the nature of a capital investment for the purpose of business of the assessee. 9. Unless this basic finding is recorded, the question cannot be decided one way or the other in the light of the provisions of Section 36(1)(iii) of the Act. We are handicapped in the absence of a commensurate finding on the part of the tribunal and therefore we are left with no choice but to set aside the order of the tribunal and remand the matter in these two appeals to the tribunal for reexamination and to record a proper finding and then apply the legal principles in the wake of the statutory provisions. 10. In the passi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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