TMI Blog2018 (5) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of the assessee u/s 36(1)(iii) of the Act. See Caldern Pharmaceuticals Ltd. vs. CIT [2003 (9) TMI 53 - CALCUTTA High Court]. - Decided in favour of assessee. - I.T.A. No. 2027/Kol/2017 - - - Dated:- 4-5-2018 - Sri J. Sudhakar Reddy, Accountant Member Shri Somnath Ghosh, Advocate, appeared on behalf of the Assessee Shri Ranu Biswas, DR, appearing on behalf of the Revenue ORDER Per J. Sudhakar Reddy This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)-11, Kolkata, (hereinafter the Ld. CIT(A) ), dt. 22/09/2017, passed u/s 250 of the Income Tax Act, 1961 (hereinafter the Act ), relating to Assessment Year 2012-13. 2. The assessee is a Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer by invoking proviso to Section 36(1)(iii) introduced by the Finance Act, 2003, w.e.f. 01/4/2004. He also observed that the assessee had not given pertinent details like financial details of M/s. Bhaktimoyee Cold Storage Pvt. Ltd. and the specific benefits/revenues that accrued to the assessee or that were likely to accrue to the assessee on this investment. 3. Aggrieved the assessee is before us. 4. After hearing rival contentions I find that the ld. CIT(A) based his order on the proviso to Section 36(1)(iii) of the Act. The undisputed fact is that the investment was made for the purpose of business. The proviso to Section 36(1)(iii) of the Act, as applicable to the impugned Assessment Year reads as follows:- (iii) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in furtherance of its business only. Accordingly, the expenditure incurred in relation thereto would be regarded for having incurred for the purposes of its business which is allowable as a deduction u/s 37(1) of the Act. We have also perused the case laws on which the assessee had placed strong reliance. The ratio laid down by various judiciaries is that interest expenditure incurred on borrowed funds utilized for acquiring controlling interest in companies would be allowable business deduction since the acquisition of controlling interest in a company is in furtherance of the business purposes of the assessee. To illustrate further, the judgments rendered by various judiciary in the context of allow ability of claim of interest u/s 36(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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