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TMI Blog2013 (4) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... hs. The total investment in shares, sundry debtors, cash and bank balance and loans and advances taken together is only Rs.2,65,323/-. Thus agreeing with the finding of the lower authorities that the assessee has not been able to discharge the onus which lay upon it to establish that the borrowed money has been utilized for the purpose of business. The various decisions relied upon by the assessee are altogether different on facts - against assessee. - ITA No.5712/Del/2012 - - - Dated:- 15-2-2013 - G. D. Agrawal And Shri Chandra Mohan Garg,JJ. For the Appellant : Shri R.M.Mehta and Shri Arun Bhatia, Advocates. For the Respondent : Dr.Sudha Kumari, CIT-DR. ORDER This appeal by the assessee is directed against the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cept interest income. He stated that the assessee company is in the business of financing and investment. That the assessee company was running into losses year after year and, therefore, money was borrowed for meeting the losses and day to day expenses of the business. He further stated that till preceding year, the assessee was dealing in shares and merely because during the year under consideration there was no trading in the shares, it cannot be said that the assessee discontinued the business. There is no finding by the Assessing Officer for discontinuation of the business of the assessee. In support of his contention, he relied upon the following decisions:- (i) Inderchand Hari Ram Vs. CIT, United Provinces, Lucknow - 23 ITR 437(All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed money was not utilized for the purpose of business. That while computing the income under the head income from business or profession, interest is allowable under Section 36(1)(iii), which reads as under:- "36. (1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28 - (iii) the amount of the interest paid in respect of capital borrowed for the purposes of the business or profession : [Provided that any amount of the interest paid, in respect of capital borrowed for acquisition of an asset for extension of existing business or profession (whether capitalized in the books of account or not); for any period beginning from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of unsecured loans is Rs. 34.31 crores. The major asset is investment which is Rs.18.33 crores. As per assessee's own statement, the borrowed money has not been utilized for the purpose of investments. It would be evident from the assessee's explanation furnished before the Assessing Officer which is reproduced in the assessment order at page 2 and for ready reference, the same is being reproduced below:- "It is respectfully submitted that the assessee company is in the business of financing and investments. The investments in equity shares of group companies have been made with a view to earn income and appreciation in value. There is no nexus between the borrowing of funds and the investments in shares. The assessee company has prep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in business of trading in shares/financing is in lakhs. The total investment in shares, sundry debtors, cash and bank balance and loans and advances taken together is only Rs.2,65,323/- as under:- Current assets, loans and E Advances Stock-in-trade 80,655 Sundry debtors 138,574 Cash and bank balances 37,882 Loans and advances 8,212 -265,323 9. In view of the above, we agree with the finding of the lower authorities that the assessee has not been able to discharge the onus which lay upon it to establish that the borrowed money has been utilized for the purpose of business. The various decisions relied upon by the learned counsel are altogether different on facts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case no part of the borrowings could be specifically attributed to the investment in shares. The overdraft accounts with the bank were secured by pledge of the shares and the amounts borrowed against the security of shares were utilised for the assessee's business. The entire pay6ment of interest on borrowings was deductible under the head "Business"." 14. Thus, in the above case, there was a finding that the amount borrowed against the security of shares was utilised for assessee's business and, therefore, interest was held to be allowable. However, in the case under appeal before us, we have concurred with the finding of the lower authorities that the assessee has not been able to establish that the borrowed money has been utilised for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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