TMI Blog2012 (9) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, had to be allowed as an allowable business expenditure - in favour of assessee. Exemption of interest on a gross basis - Held that:- The Party had paid interest to the assessee in respect of the loans advanced to it and the assessee paid interest to party in respect of the outstanding bills issued by party. There was no connection between the two transactions. The section does not require or permit the netting of payments under two independent contracts albeit between the same parties - in favour of assessee. Disallowance of expenditure on Depository Services and Dematerialisation of share certificates - Held that:- The dematerialisation of shares did not result in either a quantitative or qualitative enhancement or improvement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal is dismissed insofar as it relates to the questions sought to be raised in paragraph 4 (a) and (l) (only partly insofar as it relates to interest but not insofar as it relates to rent). 4. The order thus far is based on the order passed by us on 7.8.2012 in Income Tax Appeal No.1846 of 2010 in respect of the same respondent / assessee. In addition, the appellant has raised the following questions of law stated in paragraph 4 (f), (h), (i) and (j) :- (f) Whether on facts and in the circumstances of the case the Hon ble Tribunal was justified in law in not allowing interest to be allocated to dividend income for deduction under Section 80-M of the Income-tax Act ? (h) Whether on facts and in the circumstances of the case the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The Tribunal also upheld the order of the CIT (A). 6. The appellate authorities came to a finding of fact which do not raise a substantial question of law. Re. : Question (h) 7. The issue is covered by our order dated 7.8.2012 in Income Tax Appeal No.1846 of 2010 in respect of the same assessee / respondent. A similar question was sought to be raised in ground (g) regarding the expenditure towards the professional charges for Techno Economical Feasibility Study of Aluminium Dye Cast components paid to the agency. It was found that the issue did not raise a question of law. The Tribunal had found that there was a close nexus between the business carried on by the respondent and the feasibility study in respect of the professional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that there was no provision in section 10(23G) to allow exemption only on the net interest amount arrived at in this manner. He therefore, held that subject to necessary approval from the Central Government, the deduction under section 10(23G) ought to be allowed without adjusting interesting paid by the respondent. The Tribunal upheld the order. 10. Section 10 (23G) of the Act reads as under :- 10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included - (23G) any income by way of dividends, other than dividends referred to in section 115-O, interest or long-term capital gains of an infrastructure capital fund or an infrastructure capital com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lisation of share certificates amounting to Rs.3,09,870/- as a business expenditure even though the aforesaid expenses were clearly linked to making of investments and not for business activity of the Assessee Company? 12. The assessee incurred expenses in the sum of Rs.3,09,870/- towards the depository services and charges for dematerialisation of share certificates. A major amount related to expenses in connection with the dematerialisation of the respondent's investments in shares. 13. The AO held that the expenses had been incurred by the respondent for keeping its capital assets in a dematerialised form instead of in physical form and that therefore, the expenses incurred are capital in nature and cannot be allowed as a deduction. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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