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TMI Blog2013 (12) TMI 1600X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Revenue is justified in its plea in invoking jurisdiction under Section 263 of the Act, we do not think, the order calls for any interference to remand the matter. Advancing of funds by the assessee into the sister concern was in terms of the BIFR's order. That being the case, no useful purpose would be served by again directing a remand on the merits of the claim of the assessee. - TAX CASE (APPEAL) NO. 18 OF 2010 - - - Dated:- 1-12-2013 - MRS. CHITRA VENKATARAMAN AND MS. K.B.K. VASUKI, JJ. T. Ravikumar for the Appellant. T.N. Seetharaman for the Respondent. JUDGMENT Mrs. Chitra Venkataraman, J. The only substantial question of law on which this Tax Case Appeal, filed against the order of the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secured loan. In his proceedings, the Commissioner pointed out that the company had acquired 83% of the shares of Renowned Auto Products Manufacturers Ltd. in August 1996, by which time, the borrowing company had become a sick company, thereby increasing the financial burden of the assessee-company. 4. Referring to the proceedings before the Company Law Board, the Commissioner viewed that the company, in their own interest, infused funds in the sick company and that the same had nothing to do with the protecting of either the income base or the asset base of the assessee-company or to further its own interest. The borrowing was made by the assessee-company in its own name for investing it in Renowned Auto Products Manufacturers Ltd. Refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al has been filed by the Revenue. 6. Learned Standing Counsel appearing for the Revenue pointed out that as the order of the Company Law Board order showed, when the assessee-company itself was not doing well, it was difficult to accept the contention of the assessee as to any commercial expediency in advancing interest-free loan to the sister company; consequently, rightly, the Commissioner had exercised its jurisdiction under Section 263 of the Act. With the twin conditions thus fulfilled and the error in the order of assessment thus causing prejudice to the interests of the Revenue, no exception could be taken to the exercise of jurisdiction under Section 263 of the Act. 7. Per contra, learned counsel appearing for the assessee poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the sister concern being not a subject-matter of consideration by the Assessing Officer, apart from taking other facts into consideration, namely, the order of the Company Law Board, the Commissioner of Income Tax exercised his jurisdiction under Section 263 of the Act. As far as this aspect is concerned, the assessment records disclose that there was no consideration by the Assessing Officer on this issue of loan given by the assessee to the sick company. Going by this factual aspect, we do not find any justifiable ground to hold that there was no error in the order of the Assessing Officer to justify the invoking of the jurisdiction under Section 263 of the Act. Thus, on this, we agree with the submission of the learned Standing Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. case (supra), the Apex Court pointed out that in considering the question as to whether the amount advanced was a measure of commercial expediency, the authorities and the Courts should examine the purpose for which the assessee advanced the money and what the sister concern did with the money. The Apex Court further observed that in considering the question that the borrowed amount was not utilized by the assessee in its own business but had been advanced as interest-free loan to its sister concern is not relevant, what is relevant is whether the amount was advanced as a measure of commercial expediency and not from the point of view whether the amount was advanced for earning profits. 13. The Revenue does not dispute the fact that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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