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TMI Blog2018 (3) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... ided against revenue - I.T.A. No. 429/Kol/2016 - - - Dated:- 14-3-2018 - Shri P.M. Jagtap, AM And Shri Aby. T. Varkey, JM For The Revenue : Shri Saurabh Kumar, Addl. CIT (Sr. DR) appearing For The Assessee : Shri Ravi Tulsiyan, AR appearing ORDER Per P.M. Jagtap, AM This appeal is preferred by the revenue against the order of Ld. CIT(Appeals) 9, Kolkata dated 31.12.2015 whereby he deleted the addition of ₹ 53,46,249/- made by the A.O. by way of disallowance of interest. The assessee in the present case is an individual who filed her return of income for the year under consideration on 28.03.2013 declaring a loss of ₹ 25,93,498/-. In the said return, deduction of ₹ 53,46,249/- was claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... routed through Smt. Shyama Devi Dalmia as such even though there are no business in the hand of your assessee transactions of very big amounts are reflected in the bank. Accordingly, interests were received and paid by your assessee. 3. The above submissions made by the assessee were not found acceptable by the A.O. According to him, interest paid by the assessee had no nexus with the activities of the assessee of earning interest income mainly from bank and other deposits. He accordingly disallowed the deduction of ₹ 53,46,249/- claimed by the assessee on account of interest. 4. The disallowance made by the A.O. on account of interest was challenged by the assessee in the appeal filed before the Ld. CIT(A) and the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. ( b) Star Overseas Ltd. ( c) Shree Bihariji Trade and Services Pvt. Ltd. ( d) Tirubala Structural Pvt. Ltd. ( e) Shree Katyayani Infrastructure Pvt. Ltd. 3.3 That to protect both individual from the financial irregularities that may be committed by any of the staff employed by them, the late husband of the Appellant Assessee used to obtained fixed deposits either in his name or in the name of his wife, which also make them entitled for additional interest being senior citizen. The late husband of the Appellant Assessee also taken decision to lien the fixed deposits in the name of various parties with the bank and to take loan against lien of fixed deposits solely in the name of Appellant Assessee to avo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fixed deposits made out of funds not belonging to the Appellant Assessee. 3.6 That we would also like to submit that in similar kind of addition made in the income of the Appellant Assessee during the Astt. Year 2006- 07, Hon'ble CIT (A) deleted the addition made therein and Hon'ble ITAT in the Appeal No. I.T.A.No.:1588/Kol/2010 vide order dated 24th day of April 2014 confirmed the deletion in favour of the Appellant Assessee. The reliance in the case was placed on Munjal Sales Corporation v CIT Another [2008] 298 ITR 298 (SC) and CIT v Reliance Utilities Power Ltd. [2009] 313 ITR 340 (Bom). Since the case of the Appellant Assessee for addition of ₹ 53,46,249/- towards payment of interest on Loan taken on fixed depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings before the Assessing 0fficer as well as before him. After perusing such Bank statement, Ld. CIT(Appeals) has also given a finding that the Fixed Deposits on which interest was earned, were made out of loans taken from the Bank. Submission of ld. D.R. that the Fixed Deposits were made on dates prior to raising of the loans has not been proved or substantiated by him. Once Fixed Deposits were made out of loans taken from the Bank, in our opinion, the nexus stood when established. Even otherwise, assessee was having sufficient own funds with her for giving interest-free advances, Hon'ble Mumbai High Court in the case of CIT -vs.- Reliance Utilities and Power Ltd. (supra) at para 10 of its order had held as under : If there b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be that if these are funds available both interest free and overdraft and / or loans taken, then a presumption would arise that investments would be out of the interest free fund generated or available with the company, if the interest free funds were sufficient to meet the investments. In this case this presumption is established considering the finding of fact both by the CIT(A) and Tribunal. We are therefore, of the opinion that Ld. CIT(Appeals) was justified in allowing the interest paid on loans to be deducted from the interest earned. We do not find any reason to interfere with the order of Ld. CIT(Appeals). Grounds 3 and 4 of the revenue are also dismissed. 8. As the issue involved in the year under consideration as w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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