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Where the assessee company makes investment in its 100 per cent. subsidiary for extension of business marked by  additional capacities in manufacturing, loss or sale of such investment has to be treated as business loss of the assessee vide decision rendered in ( 2022] 28 ITR (Trib)-OL 207 (ITAT[Mum]. In this case the loss comprise of write off in overseas subsidiaries and step down subsidiaries which went into losses and even liquidation in some cases. After resolving winding up of subsidiaries and obtaining RBI approval for write off the assessee wrote off investments in its books and claimed it as a business loss. 


On perusal of previous sale purchase transactions between the holding and subsidiaries the bench held that the assessee made investment in the subsidiaries for the enhancement of top line of business activity of the assessee in global market which primarily related to business operation of the assessee and allowed loss deductions. 







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