2016 (9) TMI 599

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..... eration : (i) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the amount raised by the assessee by way of loan and interest expenditure pertaining thereto is for the purpose of business of the assessee being in nature of commercial expediency in view of the decision of Hon'ble Supreme Court in case of S.A. Builders Ltd. whereas the factual matrix of the case makes it very clear that the entire amount raised by way of convertible debenture was advanced by the assessee as a loan to the sister concern and the assessee has failed to prove that the loan was raised for the purpose of business of the assessee? (ii) Whether on the facts and in the circumstances of the case an .....

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..... uction of discount claimed was in the nature of interest free advances given to sister concern and, therefore, not wholly and exclusively expended for purposes of its business under Section 37 of the Act. On further appeal, the Tribunal by the impugned order held that the issue of debentures is in fact a loan and the discount on its issue is a business expenditure. It further held that it was an undisputed position that the amounts given / advanced by the assessee to its sister concern, in the same line of business as that of the assessee and having business connection with it. The impugned order of the Tribunal placed reliance upon the decision of the Apex Court in S.A. Builders Ltd. Vs. Commissioner of Income Tax (Appeals), 288 ITR 1 to r .....

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..... ion with each other. (e) Thus, in view of the binding decision of the Apex Court in S.A. Builders (supra), question (a) does not give rise to any substantial question of law. Thus, not entertained. 4. Regarding Question (b) : (a) The Assessing Officer invoked Rule 8D of the Income Tax Rules while disallowing expenditure under Section 14A of the Act. On further appeal, the Commissioner of Income Tax (Appeals) upheld the disallowance by the Assessing Officer on invocation of Rule 8D of the Income Tax Rules, 1961. None of the two Authorities sought to apply reasonable method for the purposes of disallowing the expenditure claimed. (b) The respondent assessee filed an appeal to the Tribunal. However, the Revenue accepted the order of the CI .....

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