Law:

Section:

[2009] 309 ITR 320 (SC)/[2008] 217 CTR 17 (SC) [2008] 217 CTR 17 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax v. Ashini Lease Finance (P.) Ltd. S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ. CIVIL APPEAL NOS. 3343 3344 OF 2008 MAY 6, 2008 Section 36(1)(iii) of the Income-tax Act, 1961 - Interest on borrowed capital Where assessee-company had acquired shares of AEC through finances arranged mainly from Torrent Group (sister companies of assessee) along with two other companies only to enable Torrent Group to acquire and take over business of AEC, question as to whether assessee was entitled to deduction in respect of interest paid by it to Torrent group was a substantial question of law The assessee company had acquired the shares of AEC through finances arranged mainly from Torrent Group (sister companies of assessee) along with two other companies. The Assessing Officer disallowed the interest paid on borrowings on ground that object of assessee was only to enable Torrent Group to acquire and take over the business of AEC. The Tribunal allowed the assessee's claim. The High Court dismissed the departmental appeal holding that no substantial question of law arose. Held that the High Court had lost sight of the above facts which, if proved and established, would indicate circular trading entered into solely with the idea of evading tax. Therefore, the High Court had erred in dismissing the appeals on the ground that no substantial question of law arose for determination. Case review : Judgment of the Gujarat High Court in Tax Appeal Nos. 918 & 919 of 2006, dated 20-12-2006 set aside. ORDER By the Court: None appears for the respondent, though served. 2. Leave granted. 3. These civil appeals are filed by the Department against the decision of the Division Bench of the Gujarat High Court dt. 20th Dec., 2006 in Tax Appeal Nos. 918/2006 and 919/2006. By the impugned , the High Court held that the facts of the present case were similar to the facts in the case of Akalu Holdings (P) Ltd. and Aashini Lease Finance (P) Ltd. in which the Tribunal has considered all aspects and has decided the matter in favour of the assessee. Consequently, the Department's…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492