2019 (6) TMI 827

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..... R. ORDER PER RAJESH KUMAR, ACCOUNTANT MEMBER: The present appeal has been preferred by the Revenue against the order dated 21.08.2017 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2014-15. 2. The only issue raised by the Revenue is against the deletion of addition of Rs. 72,88,510/- on account of advance to subsidiary written of .....

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..... ,510/- aggregating to Rs. 1,12,28,240/-. It was also submitted that loss of investment in the subsidiary on account of winding up has been disallowed in the computation of income and has been separately claimed under the head capital gains/loss. It was also stated that assessee has advanced loans and advances to subsidiary out of commercial expediency which the subsidiary could not pay and as it h .....

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..... Bench that the issue in assessment year 2012-13 has been restored by the Tribunal to the file of the AO. Therefore, current year also should be restored to the file of the AO to decide on the same lines. 6. On the other hand, the Ld. A.R. submitted before the Bench that the subsidiary has been would up. The said subsidiary PINC Mauritius and the assessee company advanced USD 1,49,810.92 equivalen .....

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..... rused the material on record. Undisputed facts are that the assessee has a subsidiary in the name of PINC Mauritius to whom the assessee provided unsecured interest free advances to the tune of USD 1,49,810.92 equivalent to Rs. 72,88,510/- for incurring necessary expenses such as incorporation expenses, statutory payments and annual maintenance expenses. The business of the subsidiary company beco .....

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..... f Vassanji Sons & Co. (P) Ltd. vs. CIT (supra) the Hon'ble Bombay High Court has held that loss to the assessee resulting from the subsidiary going into liquidation in which assessee has substantial interest and therefore the debt which became irrecoverable which was advanced by the assessee to the subsidiary company has to be treated as directly stringing from its business activity and therefore .....

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