Interest expenditure incurred for investment in group concerns constituted business activity and was allowable u/s 36(1)(iii)

ACIT Vs Tata Sons Ltd. (ITAT Mumbai) Conclusion: The dominant object of assessee’s investment in group concerns was to exercise business control by way of acquiring shareholding and not to earn the dividend. Assessee’s activity of holding such investment constituted business activity and therefore, the interest would be fully deductible u/s 36(1)(iii). Held:  Assessee was engaged in export of software and was assessed for the year under consideration u/s 143(3) on 21/03/2006 wherein the returned income of Rs.10.53 Crores as filed by assessee was assessed at Rs.858.87 Crores. Assessee ...