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TMI Blog2015 (2) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... er only on the reasoning that the interest on borrowings, if any made, for disbursing dividend is not allowable as deduction under Section 36(1)(iii) of the Act. However, the various case laws relied on by the Ld. counsel make it very clear that the interest on the amounts borrowed for payment of dividend is allowable as deduction. Thus, it is seen that the very foundation on which the impugned re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 143(3) of the Income-tax Act, 1961 (in short 'the Act') for the year under consideration, on 27.12.2010. The Ld. CIT, on examination of the record, noticed that the assessee had debited Profit Loss account with a sum of ₹ 19.45 Crores towards dividend payable to preferential shareholders. The assessee had brought forward the opening accumulated losses of ₹ 16.68 Crores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e set aside the assessment order and directed the Assessing Officer to redo the same afresh in the light of the discussion made by him. Aggrieved, the assessee has filed this appeal before us. 3. The Ld. counsel appearing for the assessee submitted that the assessee had declared only interim dividend on preference shareholders and the same was decided to be recovered subsequently. He further su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany Ltd. 79 ITR 294 (Cal.) (b) CIT v. Calcutta Electric Supply Corporation 166 ITR 797 (Cal.) (c) Shree Changdeo Sugar Mills 143 ITR 469 (Bom.) (d) Kesar Sugar Works 140 CTR 431 (Bom.) (e) Kirloskar Electric Co. Ltd. 228 ITR 674 (Kar.) (f) CIT v. Phalton Sugar Works Ltd. 162 ITR 622 (Bom.) (g) CIT v. Belapur Co. Ltd. 161 ITR 516 (Bom.) Accordingly, he submitted that the Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the amounts borrowed for payment of dividend is allowable as deduction. Thus, it is seen that the very foundation on which the impugned revision order has been passed by Ld. CIT fails, in which case we are not able to sustain the same. Accordingly, we set aside the revision order passed by the Ld. CIT. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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