9911796707
TMI Blog2015 (5) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... rrect in holding that assessee's shares were stock-in-trade and not investment shares ?" 3. "Whether the Tribunal was correct in holding that expenditure under Section 36 (1) (iii) of the Act was not linked to earning of dividend income?" ITA 54/2000 Page 2 2. In view of the developments which have occurred during the pendency of the appeal, i.e., the order passed by the Assessing Officer for AY 1993-94 and 1994-95 where the assessee's contentions have been dealt with and accepted in part so far as the administrative expenditure is concerned and in view of the order that we propose, the detailed factual narrative is inessential. 3. The assessee is aggrieved by the decision of the Income Tax Appellate Tribunal ("ITAT") which held that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest in Eicher Tractors Ltd. Learned counsel argued that Eicher Tractors Ltd. is a company closely related to the assessee and has business nexus inasmuch as the assessee provides managerial personnel for which it receives service fee as well as technical support by way of providing access to its R&D facilities. The assessee, besides, also claims to receive license fee towards plant given to Eicher Tractors for carrying on its business activity. It is stated that furthermore the products of Eicher Tractors Ltd. are exported by the assessee. Such being the case, the assessee originally held and continued to hold shares in Eicher Tractors Ltd. when the latter came out with rights issue. The assessee felt compelled to subscribe to the rights ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Structural Engineers (P) Ltd. (2013) 35 Taxmann 210. 8. Learned counsel for the Revenue urged that even though the ITAT precluded consideration of the expenditure under Section 36 (1) (iii) on the ground that shares were not held as stock-in-trade and such approach cannot be sustainable in law, nevertheless, the assessee's claim did not receive proper scrutiny by the lower authorities. Learned counsel highlighted that the CIT (A) as well as the ITAT went by whether the gross expenditure was net expenditure had to be taken into consideration while making deductions under Section 80M. It was submitted that in these circumstances, it would not be proper for this Court to render findings that the investments in this case made from the borrowin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10. This Court, therefore, is of the opinion that the law as declared by the Supreme Court in such cases is that if the expenditure is incurred for the purpose of promotion of business- more specifically as in the facts of this case to retain control or as part of a strategic investment of the assessee/company, such expenses - by way of interest outgo would have to be treated under Section 36 (1) (iii) and not under Section 57. The matter is, therefore, remitted to the AO for full appraisal of the fact situation and findings in the light of our conclusions. If, as a result of the AO's determination, it is found that such expenditure is incurred, the net expenditure is obviously to be taken into consideration under Section 80M of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
