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TMI Blog2008 (5) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... y its sister companies - after acquiring the shares of AEC Ltd., the assessee herein has sold the shares at profit – whether it amounts to circular trading with idea of evading tax – matter restored to HC - 3343 and 3344 of 2008 - - - Dated:- 6-5-2008 - S.H. KAPADIA and B. SUDERSHAN REDDY JJ. K. Radhakrishnan, Senior Advocate (H. Raghavendra Rao, Sushil Kumar and B.V. Balaram Das, Advocates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration before the High Court was: Whether the acquisition of shares by the assessee was with the object of getting control over Ahmedabad Electricity Company Ltd. (AEC) and, if so, whether interest paid by the assessee to M/s. Torrent Financiers was allowable as expenditure under Section 36 (1)(iii) of the Income Tax Act? 5. In this case, we are concerned with the Assessment Years 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lem arises where the AO has detected that after acquiring the shares of AEC Ltd., the assessee herein has sold the shares of AEC at Rs.63,57,925/- and further that subsequently, the said AEC Ltd. has been taken over and acquired by the Torrent Group. The record indicates, prima facie, that the assessee Company had acquired the shares of AEC through finances arranged mainly from the Torrent Group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls on the ground that no substantial question of law arose for determination. 7. For the aforestated reasons, we set aside the impugned judgment dated 20th December, 2006. We restore Tax Appeals Nos.918/2006 and 919/2006 on to the file of the High Court with a direction to the High Court to dispose of these appeals in accordance with law. 8. The Civil Appeals are, accordingly, allowed with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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