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TMI Blog2018 (6) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... /Mum/2015 - - - Dated:- 30-5-2018 - SHRI JOGINDER SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) For The Assessee : Mr. Vishwas V. Mehendale, AR For The Revenue : Mr. V. Justin, DR ORDER PER N.K. PRADHAN, AM The captioned appeals filed by the assessees are directed against the order of the Commissioner of Income Tax (Appeals)-17, Mumbai [in short CIT(A) ] and arise out of the assessment completed u/s 143(3) of the Income Tax Act 1961 (the Act ). As common issues are involved, we are proceeding to dispose them off through a consolidated order for the sake of convenience. ITA No. 3998/Mum/2015 Assessment Year: 2011-12 2. The grounds of appeal raised by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of advance bearing interest stands ₹ 1,07,54,069/- on which interest received of ₹ 15,59,340/- at average rate of 14.5%. The year wise break up of advance given from the year 01.04.2006 to 31.03.2010, 01.04.2007 to 31.03.2008, 01.04.2008 to 31.03.2009, 01.04.2009 to 31.03.2010, 01.04.2010 to 31.03.2011. The above statement shows that no interest was charged till 31.03.2009 on loan advanced as an investment to Milan Decor Pvt. Ltd. of ₹ 81,05,200/- a company in which director are interested and have shareholdings and the amount continued to remain as interest-free advance in form of investment subsequent year also. As M/s Milan D cor Pvt. Ltd. continued to remain as a loss making until till date. The above adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the Ld. counsel of the assessee files a Paper Book (P/B) containing (i) written submission dated 23.11.2013 before the DCIT-8(2), Mumbai, (ii) loans borrowed- Op. balance, new received and repayments during the year, interest for the year and cl. Balance, (iii) appellant s fund flow analysis and (iv) advances- Op. balance, new received repayments during the year, interest for the year and Cl. Balance. The Ld. counsel files a chart indicating the following Vipul in Rs. Padamshi in Rs. Advances Given-Interest Bearing 107,54,069 162,76,296 Advances Given-Free of Interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce is placed by him on the decision in CIT v. Rockman Cycle Industries (P.) Ltd. (2011) 331 ITR 401 (P H) and CIT v. Rajendra Prasad Moody (1978) 115 ITR 519 (SC). The Ld. counsel further submits that there is no such in section 57(iii) that interest claimed can be restricted to the extent of interest received. The only condition is whether the interest paid is genuine or not. No finding as to whether the interest claimed of ₹ 8,11,868/- is a non-genuine claim is given by the AO. Thus it is stated that the interest claim of ₹ 8,11,868/- under the head income from other sources is not properly disallowed and hence the same may be deleted. 6. On the other hand, the Ld. DR relies on the decision in CIT v. V.P. Gopinathan ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng into the substance of the transaction, (iv) taxing authority must not look at the matter from their own view point but that of a prudent businessmen. 7.1 In the instant appeal, the assessee could file before the AO, only the year wise statements of unsecured loans and advances given. The same is evident from the order of the AO as well as that of the Ld. CIT(A). In view of the above facts, the case of the assessee is distinguishable from the above decisions relied on by the Ld. counsel. 7.2 We now turn to the decisions relied on by the Ld. DR. In the case of V.P. Gopinathan (supra), the assessee had put moneys into fixed deposit with a bank and had earned in the assessment year in question interest in the sum of ₹ 1,17,444/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) in order that an expenditure may be admissible u/s 57(iii) it is necessary that the primary motive of incurring it is directly to earn income falling under the head Income from other sources and (iii) u/s 57(iii), deduction will not be allowed if the expenditure is not incurred for the purpose of earning income falling under the head Income from other sources . 7.4 We are of the considered view that the ratio laid down by the Hon ble Bombay High Court in the case of Amritaben R. Shah (supra) squarely applies to the present case. We find that neither the AO nor the Ld. CIT(A) has examined the contentious issue in the light of the above decision. Therefore, we set aside the order of the Ld. CIT(A) and restore the matter to the file ..... X X X X Extracts X X X X X X X X Extracts X X X X
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