9911796707
TMI Blog2017 (4) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... business consideration on the ground that the amount of interest has been paid on loans taken has actually been diverted towards investment in shares and other non interest bearing investment. Assessee appeal dismissed. - Tax Appeal No. 137 of 2017 - - - Dated:- 23-3-2017 - M. R. Shah And B. N. Karia, JJ. Mr RK Patel, Advocate for the Appellant JUDGMENT ( Per : Honourable Mr. Justice M. R. Shah ) Draft Amendment is allowed. 1.0. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income Tax Appellate Tribunal dated 21.03.2016 passed in ITA No.1871/-AHD/-2010 for AY 1996-97, by which, the learned Tribunal has dismissed the said appeal preferred by the assessee, the assessee has preferred the present appeal with the following proposed question of law. A. Whether on the facts and evidence on record, the Tribunal has substantially erred in law in confirming the disallowance of ₹ 30,47,240/-towards the claim of Bad Debts /- Business loss ? B.Whether on the facts and evidence on record, the Tribunal has substantially erred in law in confirming the disallowance of ₹ 23,54,592/-towards the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee preferred appeal before the learned Tribunal and learned Tribunal by impugned judgment and order has confirmed the disallowance to the extent of ₹ 30,47,240/-towards claims of Bad Debts /- business loss and also confirmed the disallowance of ₹ 23,54,592/-towards the claim of interest. 2.6. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned ITAT in confirming the disallowance of ₹ 30,47,240/-towards claim of Bad Debts /- business allowance and confirming the disallowance of ₹ 23,54,592/-towards the claim of interest, the assessee has preferred present appeal with the aforesaid proposed question of law. 3.0. Shri R.K. Patel, learned advocate for the appellant has vehemently submitted that the learned Tribunal has materially erred in confirming the allowance of ₹ 30,47,240/-out of total disallowance of ₹ 54,29,508/-made by the CIT(A) on account of bad debts /- business loss claimed by the assessee on the ground that assessee was not carrying business for the relevant year under consideration i.e. AY 1996-97. 3.1. It is further submitted by Shri Patel, learned advocate for the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has furnished the funds flow statement showing the source and application of funds. It is submitted that therefore, the learned Tribunal has materially erred in disallowing the interest of ₹ 23,54,592/-. 4.0. Heard Shri R.K. Patel, learned advocate for the appellant-assessee at length. We have reappreciated the entire material on record including earlier order of remand passed by the learned Tribunal, from the paper book produced by Shri Patel, learned advocate for the appellant. We have also perused and considered in detailed the impugned order passed by the learned Tribunal as well as order passed by the AO and the learned CIT(A) passed after first round of proceeding and after the earlier order of remand passed by the learned ITAT. 4.1. It is the case on behalf of the assessee that the impugned order passed by the learned Tribunal in confirming the disallownace of ₹ 30,47,240/-towards claim of bad debts /- business loss and in confirming the disallowance of ₹ 23,54,592/-towards claim of interest paid for business consideration is absolutely contrary to the finding recorded by the learned Tribunal in the first round of proceeding. It is the case on be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his MOU and also the balance referred in this MOU as on 31.3.1996 at ₹ 62,01,858.92 is looking far from truth and baseless because as on 31.3.1995 the amount of Samrajya Coop. Housing Society has shown ₹ 14,08,458 and the same has increased by ₹ 4721440.37 to ITA No. 1871 1872/-Ahd/-2010 15 Asst. Year 1996-97 199798 arrive at ₹ 62,01,858.92 in a peculiar situation when there is no revenue booked in the current year. Bad debts in relation to sundry debtors can be claimed only if sales/-revenue has been booked in the books of account which does not happen to be so in the case of assessee referring to the financial statement relied on by the assessee. 26. In our view, looking to the facts and circumstances of the case, when assessee's case has travelled to the Tribunal in the second round and assessee had sufficient opportunity to prove the genuineness of the claim of bad debt of ₹ 30,47,240/-and then also he has been unable to satisfy the lower authorities and even before us, during the course of hearing, we do not find any reason to accept the contentions and claim made by the assessee in this ground relating to disallowance of bad debt of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act nexus has to be proved that the same has been incurred for earning the income shown under the provisions of section 56 of the Act i.e. the income from other sources. Applying these provisions to the facts of the case, we find that assessee has declared interest income of only ₹ 534557/-and has claimed interest expenses of ₹ 4554551/-Out of total interest claimed at ₹ 4554551/-Assessing Officer has already allowed the claim at ₹ 2199959/-and for the balance amount of interest of ₹ 2354592/-nothing was placed on record by the assessee to prove that it has been spent to earn interest income which has been declared u/-s 56 of the Act and rather we find force in the observation made by ld. Assessing Officer that the amount of interest of ₹ 2354592/-has been paid on loans taken has actually been diverted towards investment in shares and other noninterest bearing investment and this gets further support by the fact that assessee has earned long term capital gains of ₹ 13260055/-. In these circumstances, we are unable to accept the contention made by ld. AR of assessee about the allowability of interest expenses at ₹ 2354592/-under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
