2012 (4) TMI 787 - AT - Income Tax

Summary

Issues involved: Difference of opinion between Members, loan to subsidiary company, order u/s 154, amortization of public issue expenses u/s 35(2), interest on bank deposit and RBI Bonds, levy of interest u/s 234B.

Loan to subsidiary company: The Learned Vice President found that the loan given to the subsidiary company for business necessity should be allowed as business expenditure u/s 37 of the Income-tax Act, concurring with the view of the Learned Judicial Member.

Order u/s 154: The Learned Vice President concurred with the view of the Learned Accountant Member regarding the order u/s 154, stating that the disallowance of the loan does not arise from this order.

Amortization of public issue expenses u/s 35(2): The order of the Commissioner of Income-tax(A) regarding the amortization of public issue expenses u/s 35(2) was confirmed.

Interest on bank deposit and RBI Bonds: Both original Members agreed that interest on bank deposit and RBI Bonds should be assessed as "Income from other sources," setting aside the order of the Commissioner of Income-tax(A) and allowing that of the assessing officer.

Levy of interest u/s 234B: The issue of levy of interest u/s 234B was set aside to the file of the Commissioner of Income-tax(A) for a decision in accordance with the law after affording an opportunity of hearing to both parties.

Result: Both the appeals of the revenue and the cross objections were partly allowed, with the order pronounced on April 27, 2012.