Case: Commissioner of Income Tax Vs. Ashini Lease Finance Ltd

3. These Civil Appeals are filed by the Department against the decision of the Division Bench of the Gujarat High Court dated 20th December, 2006 in Tax Appeals No.918/2006 and 919/2006. By the impugned judgment, the High Court held that the facts of the present case were similar to the facts in the case of Akalu Holdings Pvt. Ltd. and Aashini Lease Finance Pvt. Ltd. in which the Tribunal has considered all aspects and has decided the matter in favour of the assessee. Consequently, the Departments appeals stood dismissed by the impugned judgment. Hence, these Civil Appeals. The short question which arose for 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?

Reasoning:
6. Therefore, in our view, the High Court had erred in dismissing the appeals on the ground that no substantial question of law arose for determination. 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.