2012 (6) TMI 265

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..... to how the activity constituted a business activity and the borrowing also constituted an investment, which is in the nature of a capital investment for the purpose of business of the assessee - in the absence of a commensurate finding on the part of the tribunal remand the matter back for reexamination and to record a proper finding and then apply the legal principles.
D V Shylendra Kumar and K Govindarajulu, JJ. For Appellants: Shri E R Indrakumar, Sr. Counsel, and Shri E I Sanmathi, Adv. For Respondent: Shri S Parthasarathi, Adv. JUDGEMENT These two appeals by the revenue under Section 260A of the Income Tax Act, 1960 [for short, the Act] is in respect of the common order dated 14.9.2005, passed by the Income Tax Appellate Tribuna .....

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..... the commissioner of income tax (appeals). The appellate commissioner did not agree with the contention of the assessee and therefore dismissed the appeal. 5. The assessee further appealed to the tribunal and net with success in terms of the impugned order. The appellate tribunal, with reference to certain decided cases of other benches of the tribunal, thought that the view taken by the other benches to the effect that investment of like nature had been taken as investment of capital in the business activity of those assessee companies, disposed of the appeals before it also on like terms, as it was of the view that the appeals before the tribunal were akin to the like appeals before the other benches. It is against this order of the trib .....

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..... books of account or not), for any period beginning from the date on which the capital was borrowed for acquisition of the asset till the date on which such asset was first put to use, shall not be allowed as deduction. Explanation - Recurring subscriptions paid periodically by shareholders, or subscribers in Mutual Benefit Societies which fulfil such conditions as may be prescribed, shall be deemed to be capital borrowed within the meaning of this clause: 8. The basic question in the context of this statutory provision is as to whether the investment was in the nature of capital investment for the purpose of business activity of the assessee. Unfortunately, we find that the tribunal, which has reversed the decision of the assessing office .....

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