9911796707
TMI Blog2011 (8) TMI 1325X X X X Extracts X X X X X X X X Extracts X X X X ..... ekar P. C. :- 1. Whether the ITAT was justified in holding that the loss of ₹ 72,99,996/- incurred by the respondent-assessee was allowable as a business loss under Section 37 of the Income Tax Act, 1961, is the question raised in this appeal. 2. The assessment year involved herein is AY 1997-98. 3. On 22nd February, 1995 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Tainwala Chemicals and Plastics (India) Ltd. was ₹ 14/- per share. The assessee for commercial reasons thought it fit not to subscribe to the shares offered by the company, as a result thereof Tainwala Chemicals and Plastics (India) Ltd. forfeited the amount of ₹ 72,99,996/- invested by the assessee company in the naked convertible warrants. 4. In the return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Apex Court by its order dated 7/2/2011 set aside the order passed by this Court on 1/4/2009 and restored the appeal with a direction to reconsider the question as regards the financial position of Tainwala Chemicals and Plastics (India) Ltd. on the date of investment and whether the assessee made investments knowing fully well the vulnerable financial position of Tainwala Chemicals Plastics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up concern with ulterior motives. From the affidavit filed by the Director of the assessee company, it is seen that the profits of Tainwala Chemicals and Plastics (India) Ltd. for the year ending 31st March, 1995 were ₹ 4.02 crores and dividend of 25% was declared by the company in September, 1995. Net profit of the said company before the depreciation for the year 31st March, 1996 was ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmercial decision to forgo the amount invested in naked convertible warrants than to invest further amount by subscribing to the shares at a price offered by the company. Consequently, no fault can be found with the decision of the ITAT in allowing the loss incurred by the assessee on forfeiture of the amounts invested by the assessee in naked convertible warrants. Accordingly, the appeal is dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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