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TMI Blog2017 (11) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred for earning the income u/s 57(3) of the Income Tax Act, 1961. There is no need to interfere with findings given by the CIT(A). Therefore, the present appeal of revenue needs to be dismissed. - ITA No. 3394/DEL/2013 And ITA No. 4565/DEL/2013 - - - Dated:- 6-11-2017 - SHRI N. K. SAINI, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER For The Appellant : Ms. Sonal Jain, CA Sh. Himanshu Jain, CA For The Respondent : Smt. Aparna Karan, CIT(DR) ORDER PER SUCHITRA KAMBLE, JM These appeals are filed by the Revenue against the order dated 20/03/2013 13/05/2013 for the A.Ys. 2009-10 and 2010-11 respectively passed by CIT(A)-XXX, New Delhi. 2. The grounds of appeal are as under:- On th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for acquiring immovable property and issuing directions to adjust the same against the income from other sources; ( ix) Holding that the loan taken from Reliance capital Ltd. was for the purposed of earning income from other sources; ( x) Holding that the intention of the assessee was to earn assurance return given by the Omaxe Ltd and to purchase multiplex in the commercial space in Omaxe NRI City; ( xi) Directing to allow the interest on loan u/s 57(3) of the I.T Act though the same is specifically allowable u/s 24(b) of the I.T. Act. ( xii) Holding that the interest on loan was a revenue expenditure and not a capital expenditure; ( xiii) Holding that the assessee had made an investment in commercial p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be situated in Greater Noida, UP. The assessee had obtained the loan of ₹ 6,00,00,000/- from Reliance Capital Ltd. and had paid it to Omaxe Ltd as advance for the aforesaid project. During the subject Assessment Year, the assessee jointly with his brother Mr. Ranjan Dagar earned interest income of rs.72,51,912/- from Omaxe Ltd on the advance given to Omaxe Ltd and duly offered his 50% share of interest income of ₹ 36,25,956/- for taxation under the provisions of Section 56 of the Act. Further, since the loan was taken form Reliance Capital Ltd to give the advance to Omaxe Ltd, the assessee has claimed deduction of interest payment of ₹ 40,80,835/- (50% of the total interest payment actually paid limited to 50% of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan taken from Reliance Capital Ltd was for the purpose of earning income from other sources was not justified on part of the CIT(A). The Assessing Officer has rightly added the said amount which was never the case of the assessee that the loan taken from Reliance Capital Ltd. was for the purpose of earning income from other sources. The CIT(A) erred in holding that the intention of the assessee was to earn assurance return given by the Omaxe Ltd and to purchase Multi Plex in the Commercial Space in Om NRI Study. 12. The Ld. AR submitted that the ITAT in assessee s brothers s case Shri Ranjan Dagar has dismissed the appeal of the Revenue. The facts of the case are similar and in fact in the present assessment order the name of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y (1978) 115 ITR 519, held that the interest expenditure incurred by the assessee on the loan availed of from Reliance Capital Limited is directly related to interest income earned on advance made to M/s. Omaxe Limited and as such, it is allowable. However, the ld. DR for the Revenue relied upon the order passed by AO. 10. When we examine the facts of this case, it is undisputed that the AO has disallowed the interest of ₹ 40,80,835/- and ₹ 33,23,793 for AYs 2009-10 and 2010-11 respectively paid by the assessee on the loan of ₹ 6,00,00,000/- availed of from M/s. Reliance Capital Limited and invested the same in M/s. Omaxe Limited for getting assured return only. However, M/s. Omaxe Limited has resiled form its promise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - The plain natural construction of the language of s. 57(iii) of the Income-tax Act, 1961 irresistibly leads to the conclusion that to bring a case within the section, it is not necessary that any income should in fact have been earned as a result of the expenditure. What section 57(iii) requires is that the expenditure must be laid out or expended wholly and exclusively for the purpose of making or earning income. This section does not require that this purpose must be fulfilled in order to qualify the expenditure for deduction. It does not say that the expenditure shall be deductible only if any income is made or earned. Where the assessee borrowed monies for the purpose of making investment in shares and paid interest thereon du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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