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TMI Blog2017 (6) TMI 979X X X X Extracts X X X X X X X X Extracts X X X X ..... . "On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the further disallowance of interest of Rs. 48,89,648/- on restricting the interest expense to the extent of interest income, stated as under:- Interest paid as per P&L A/c Rs. 1,15,82,972/- Less:- Voluntarily disallowed in ROI Rs. (35,45,901) Interest claimed by the appellant Rs. 80,37,071/- Less:- Interest Income Rs. 31,47,423/- Further interest disallowed in assessment Rs. 48,89,648/- 3. At the outset, the Ld. Counsel for the assessee submitted that he is not pressing ground No. 2 & 3, hence, we dismiss ground No. 2 & 3 as not pressed. 4. The short facts of the case are as under:- The assessee is in the business of Trading in properties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out and the relief was granted to the assessee. The same loan is carried forward from the Asst. year 2007-08 therefore, it may be allowed. 6. On the other hand the Ld. DR objected to it on the ground that it is an undisputed fact that the assessee had received interest income of Rs. 31,47,423/-. No other income in the nature of business is offered to tax by the assessee in its return of income. During the year the assessee had engaged in the business of money lending and marketing activities. No income was shown by the assessee from marketing activities and no evidence has been submitted by the assessee. The assessee was also asked to furnish the evidence like licence under the provisions to show money lending, the assessee could not prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed material available on record including case laws relied upon by AR. As the issue of change of head of interest income has not been pressed, our findings in the issue shall be restricted only to determine the amount of interest disallowance qua interest income offered under the head 'Income from other sources'. At the outset, it would be prudent to reproduce relevant statutory provision as contained in Section 57 which reads as follows: "57. The income chargeable under the head "Income from other sources" shall be computed after making the following deductions, namely:- (i) ..... ..... (iii) any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance on the basis of facts and circumstances of the case. For this, it would be necessary to appreciate the capital structure of the company as on the last date of the impugned financial year which is extracted below:- The assessee has claimed interest expenditure of Rs. 176.62 Lacs on interest bearing funds obtained amounting to Rs. 1600.76 Lacs (excluding interest due) on which average interest rate works out to be Rs. 11.03%. Against those funds, non interest bearing funds / Share application money advanced by assessee amounts to Rs. 628.02 Lacs. Applying average interest rate of 11.03% on this amount, proportionate interest disallowance comes to be Rs. 69.27 Lacs out of which the assessee has made suo-moto disallowance of Rs. 59.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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