9911796707
TMI Blog2016 (6) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... rein was dismissed by observing in paragraph No.26 as under: "26. The reopening, though for escapement of interest from contracts not assessed ultimately, cannot be said to be bad in law because the assessee had not filed return at all. In the case of I.N. Dalmia, the assessee borrowed money for acquiring shares in company named Punalur Paper Mills Ltd., [hereinafter referred to as the "PPM"] and had paid interest thereon. The assessee floated another company named Laxminiwas and Co. (Export) P. Ltd. [hereinafter referred to as the "LNE"] and sold aforesaid shares of PPM to this newly floated company. Till then it was not incorporated, but the transaction was ratified on its incorporation. The A.O. also held that the LNE was dummy of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added to its cost of acquisition for compensation of capital loss. On this issue, the appellate authorities answered it in the affirmative. The interest was paid allegedly on the moneys borrowed for the acquisition of the shareholding by the assessee. The interest was not claimed as capital investment and no claim was made for the capitalization of the same. The Assessing held that the assessee did not earn anything from the shares purchased out of the borrowed amount. As there was no income from the shares held by him, the interest could not be allowed. The appellate authorities hold that this interest was incurred in respect of borrowed funds utilized for the purpose of acquisition of shares and such interest would be considered as a capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed being part of cost of acquisition of shares has not been appealed against. It is well settled that an allowance for deduction can be upheld on a ground other than that on which it was allowed by the Tribunal. We, accordingly, hold that the interest in question in the present case cannot be part of the cost of production. It is allowable against the income from the investment in question and it can be considered to be set off against the income from other sources. In the circumstances, this issue is answered saying that the said sum on account of interest is allowable as deduction under the head "Other sources". 2. This Court vide order dated 28/12/2004 while admitting the appeal has framed the following substantial question of law: " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings which was not mentioned in the reason for issuing notice under Section 148 of the Act. In a notice for reassessment which has been issued beyond a period of four years from the end of relevant assessment year, the condition that income chargeable to tax has escaped assessment for the reason of the failure on the part of the assessee to disclose truly and fully all material facts for the purpose of assessment must also be established unless ofcourse some other ground viz. nonfiling of the return at all etc. is available to the Assessing Officer. If such nondisclosure of material facts is established with respect to the reason recorded for issuing notice for reopening the assessment, it would be open for the Assessing Officer to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouncements and the explanatory memorandum for introduction of Explanation 3 to Section 147 of the Act, ruled in favour of the assessee. *** 33. In the result, we answer the question in the affirmative i.e. in favour of the assessee and against the revenue. All tax appeals are dismissed." 5. On the other hand, learned Counsel for the Department has submitted that the view taken by the ITAT is just and proper and there is no need to interference in the findings recorded by the Tribunal. 6. We have heard learned Counsel for the parties. 7. Attention of this Court is invited to a decision rendered by Hon'ble Apex Court in Commissioner of Income-Tax v Bokaro Steel Ltd., reported in [1999] 102 Taxman 94 (SC) where also said issue has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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