9911796707
TMI Blog2011 (4) TMI 1391X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal relates to an addition of ₹ 10,96,266/- made by the Assessing Officer out of the interest payments. The facts, in brief, are that during the course of assessment proceedings, the Assessing Officer noticed that the assessee availed unsecured loans from various parties and claimed interest on account of these loans. It was also noticed that the assessee had advanced loans to Prithvi Developers of ₹ 82,82,810/- and to Subhadradevi Malu of ₹ 6,94,850/-. The assessee had not shown any interest receipts out of the above loans, but was claiming interest payments on various loans. According to the Assessing Officer, therefore, the assessee was acting as per his convenience and this was prejudicial to the interest of Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture could not be held to be conditional upon the making or earning of income. After considering the submissions of the assessee, Commissioner of Income-tax (Appeals) held that the Assessing Officer was not justified in disallowing the interest of ₹ 10,93m754/- in respect of the investment made by the assessee to M/s Prithvi Developers. He accordingly directed the Assessing Officer to delete the said disallowance. Being not satisfied with the action of the Commissioner of Income-tax (Appeals), the Revenue is in appeal before us. 4. Before us, the learned Departmental Representative, appearing for the Revenue, strongly supported the order of the Assessing Officer and submitted that in the facts and circumstances of the case, the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant was covered as unsecured loan after the retirement of the appellant. ii. Non-receipt of any interest by the appellant during the period relevant to the AY 2005-06. Now the question to be decided is as to whether the AO was justified in disallowing the interest payments claimed by the appellant on the round that no interest income was received out of the said investments. It is also clear from the submissions that the entire interest payment cannot be attributed to the investment in the said firm. As per the workings given by the appellant, the interest which can be attributed for the investment is only ₹ 6,86,700/- as against ₹ 10,93,754/- estimated by the AO. From the facts of the case it is very clear that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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