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TMI Blog2018 (12) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... Gupta, Adv. ORDER The Court: It is an admitted position that with borrowed funds, the appellant acquired control of the two companies. The interest paid on the borrowed funds was claimed as an allowable expenditure by the assessee under Section 36(1)(iii) read with Section 57 of the Income Tax Act, 1961. Ms. Banerjee led by Ms. Agarwal, learned counsel, for the appellant also invoked Section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 37 covers expenditure of a general nature which are not classifiable under Sections 30 to 36. But, they ought not to be capital expenditure or personal expenses of the assessee. That expenditure which is wholly and exclusively laid out for the purpose of business or profession shall be allowed in computing the income chargeable. The Tribunal had to go into this question only. What the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e would be dividend. In other words, at the most, it had to see whether any part of the income of the assessee for the assessment year was dividend income; and whether any part of the expenditure for acquiring control of the two companies were being applied to claim deduction from that income. Look at the reasons given by the Tribunal in its impugned order dated 11th April, 2008: "We have caref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts made and salary earned by the assessee as managing director of the aforestated companies expenditure on interest, to the extent the borrowed funds were utilized in investment of shares, cannot be allowed. The decision of the CIT(A) cannot, therefore, be upheld." The impugned order of the tribunal dated 11th April, 2008 is set aside. The order of the Commissioner of Income Tax (Appeals) dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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