L.K. TRUST Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This appeal is at the instance of the assessee and is directed against the Judgment and Order passed by the High Court of Karnataka dtd. 1/3/2010 in Income Tax Appeal No. 175 of 2001 by which the appeal preferred by the Revenue against the Order passed by the Income Tax Appellate Tribunal came to be allowed.

(2.) The short point that falls for our consideration is whether the appellant - assessee is entitled to a deduction of Rs.21,74,234.00 (Rupees Twenty One Lakh, Seventy Four Thousand, Two Hundred and Thirty Four only) being the interest paid by it in respect of the loan availed from the Corporation Bank under Sec. 36(1)(iii) of the Income Tax Act 1961 (for short, "the Act 1961 ").

(3.) It appears from the materials on record that the assessee borrowed a sum of Rs.3,80,00,000.00 (Rupees Three Crore and Eighty Lakh only) from the Corporation Bank to purchase shares of Shaw Wallace and Company Limited in pursuance of an Agreement dtd. 19/11/1987. Under the said Agreement, the Company had committed to sell 7.80 lakh shares for a total consideration of Rs.3,80,00,000.00.