TMI Blog2020 (1) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... tment made in shares by the assessee by utilising borrowed capital was for strategic business purposes because the companies were promoted as special purpose companies to strengthen and promote its existing business by combining different business segments and, therefore, the claim was fully allowable under Section 36(1)(iii). We also found that the Revenue did not adduce any material to show that the borrowed capital was utilised by the assessee for non-business purposes. The appellate authority, in our considered view, was correct in allowing the claim of the assessee and deleting the disallowance made by the assessing authority. We also find that the Tribunal in correct appreciation of the matter had in turn confirmed the finding of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee company? 1. Learned counsel for the respondent/assessee Mr.Jayakumar submitted that, the controversy is no longer res integra and has been decided by the Coordinate Bench of this Court in the case of assessee itself in Commissioner of Income Tax (Vs) R.P.G.Transmissions Limited (later on name changed to M/s.KEC International Ltd ) reported in (2013) 359 ITR 0673 (Mad). 3. The relevant portion of the judgment of the Coordinate Bench of this Court is quoted below for ready reference. 41. It is an admitted fact that substantial expenditure on payment of interest was incurred only on account of borrowings which appears to have been invested in shares, savings certificates, fixed deposits etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mandated in the Section to confine such expense. Furthermore, the Section also does not place any embargo for investments to be made in group concerns and subsidiary concerns. Therefore, we are not in agreement with the findings of the Commissioner of Income Tax (Appeals) and concur with the findings of the Tribunal in this regard. 43. In our judgment in the tax case appeal in T.C.(A) No.1980 of 2008 (since reported in CIT Vs.Spencers and Co. Ltd., (No.3 [2013] 359 ITR 644 (Mad) which was heard along with these appeals and disposed of today, we have elaborately discussed the issue relating to payment of interest on borrowed capital and the reasons given by us in the said judgment for sustaining the order of the Tribunal are als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no fresh investment for the assessment year 2004-05, he has made additions under Section 36(1)(iii) of the Act. 5. Learned Senior Standing Counsel for the revenue Mr.T.Ravi Kumar, however sought to distinguish the said facts, while not disputing the fact of no investments made in the present case for the assessment year 2004-05 in question. 6. Having heard the learned counsel for both parties, we of the clear opinion that, since the very investments were made in the preceding assessment years viz., 1997-98 to 2001-02, and the same has been the subject matter of the appeal filed by the Revenue before this Court, which has been decided against the appellant Revenue by the aforesaid judgment and there was no fres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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