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TMI Blog2011 (3) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... fit making company. If the promoters are so concerned about the financial health of the group company and also the brand name, the money can very well be invested by the promoters out of their own resources. - Deduction not allowed - decided against the assessee. - 803 of 2010 (O&M) - - - Dated:- 4-3-2011 - MR. JUSTICE ADARSH KUMAR GOEL, MR. JUSTICE RAJESH BINDAL, JJ. Mr. Akshay Bhan, Advocate for the appellant. Rajesh Bindal J. The assessee is in appeal before this Court raising following substantial questions of law, arising out of order dated 17.5.2010, passed by the Income Tax Appellate Tribunal, Chandigarh, Bench Rs. A', Chandigarh (for short, Rs. the Tribunal') in ITA No. 768/CHD/2005 for the assessment year 2001 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of subsidy given to M/s Majestic Auto Ltd. Aggrieved against the order, the assessee filed appeal before the Commissioner of Income Tax (Appeals), Ludhiana [for short, Rs. the CIT (A)'], which was dismissed vide order dated 4.5.2005. The order passed by the CIT(A) was upheld by the Tribunal vide order dated 17.5.2010. The assessee is in appeal before this court raising substantial questions of law arising out of the aforesaid order. Learned counsel for the assessee submitted that M/s Majestic Auto Ltd. is a sister concern of the assessee. In fact, it was promoted by the assessee, which holds 29.16% of its share capital. Being a promoter company, it had undertaken to secure various loans raised by M/s Majestic Auto Ltd. from IFCI and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g else but evasion of tax. The assessee holds merely 29.16% shares in M/s Majestic Auto Ltd. Even if it had stood guarantor or had furnished certain undertaking or assurance to the financial institutions for securing the loans raised by M/s Majestic Auto Ltd., a sister concern, there is no sanctity available in law to give money as a subsidy and claiming the same to be an expense in a profit making company. If the promoters are so concerned about the financial health of the group company and also the brand name, the money can very well be invested by the promoters out of their own resources. There is no justification for taking the money out from a profit earning company, giving the same to a sister concern in the form of subsidy and then c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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