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TMI Blog2018 (5) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that:- We set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO to make a fresh order after examining the contentions of the assessee. AO would examine the Fixed Deposit ledger account as well as Bank Book for the year under consideration as well as of preceding year. We direct the assessee to file the relevant documents/evidence before the AO. Disallowance of business loss - AO disallowed on the ground that the assessee has not done any business activity during the year under consideration and in the earlier years - Held that:- It is found from the annual accounts that the assessee has claimed a deduction of ₹ 7,894/-. It represents expenditure on rates and taxes to the tune of ₹ 14,768/-. Out of the above sum, an amount of ₹ 6,876/- has been disallowed u/s 14A of the Act. We further find that the above expenditure claimed is towards maintaining existence of the company. In view of the above facts, we delete the disallowance - ITA No. 3137/MUM/2016 - - - Dated:- 25-4-2018 - SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) For The Assessee : Ms. Dinkle Hariya, AR For The Revenue : Mr. M.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... constructed, repaired, renewed or re-constructed, should be existing during the year after it has been used/let out, nor on such prima facie perusal, we come across any such embargo, which therein contemplates that despite the fact an assessee had satisfied all the requisite conditions under Sec. 24, he would however stand disqualified from raising the claim, for the reason that the property had ceased to be in existence. We are however of the considered view, that a careful perusal of Section 24, which contemplates that the deductions are to be allowed at the time of computing the 'Income chargeable under the head 'Income from house property', thus presupposes the very existence of the 'Annual Value of the property, failing which, the entitlement of the assessee towards claim of deductions contemplated therein, would stand jeopardized. Thus, now when the determination of the 'Annual Value', as stands gathered from a conjoint reading of Sec. 22 r.w Sec. 23 of the Act', itself requires the existence of the property, therefore, we though find ourselves to be in agreement with the view of the A.O, that to the extent where a property is not in existence d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally not made available on the statute by the legislature in all its wisdom. We being not oblivious of the fact, that by subscribing to the view adopted by the lower authorities, and therein upholding the pro rata disallowance of 'Interest on borrowed capital', for the part of the year during which the property of the assessee had ceased to be in existence, we would be doing violence to the literal interpretation of the aforesaid statutory provision, which would blatantly militate against its plain meaning. We thus, in light of our aforesaid observations are unable to persuade ourselves to subscribe to the findings of the lower authorities, who we are of the considered view, had erroneously restricted the claim of the assessee towards interest payable on the borrowed capital, only for the part of the year during which the property had remained in existence. We are persuaded to observe that if the legislature would have intended to restrict such a claim of the assessee, then the same would have specifically been provided for in the statute. We are thus of the considered view that the CIT(A) had erred in sustaining the order of the AO and thus misinterpreting the scope and ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion between the interest earned and interest paid cannot be established and therefore, netting of interest in not available to the assessee. On the above reasons, the Ld. CIT(A) differed from the decision of his predecessor and dismissed the appeal filed by the assessee. 10. Before us, the Ld. counsel of the assessee files a Paper Book (P/B) containing (i) copy of ITAT order for Ay 2011-12, (ii) copy of computation of income for AY 2012-13, (iii) copy of computation of income for AY 2013-2014, (iv) copy of assessment order u/s 143(3) of the Act for AY 2013-14, (v) copy of submissions for Assessing Officer for AY 2013-14 [(a) letter dated 06.11.2015, (b) letter dated 29.02.2016] and (vi) copy of CIT(A) order for AY 2011-12. The Ld. counsel submits that as there is direct and proximate nexus between borrowed fund and money pledged as short term deposits with bank, the interest expenditure was claimed as set off against interest income. 11. On the other hand, the Ld. DR relies on the order of the Ld. CIT(A). 12. We have heard the rival submissions and perused the relevant materials on record. It would be relevant to go through the submission made by the assessee before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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