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TMI Blog2018 (11) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... ent account of the partnership firm and matching utilisation of the funds with relevant statements of bank account. The assessee neither produced the details before the AO nor before the CIT(A) regarding the application of withdrawals made from the current account/capital account with tangible evidence such as relevant bank account copies etc. Assessee did not furnish the statement of affairs or the balance sheet from the date of first overdrawal till date to demonstrate the application of funds. No reason to differ with the finding given by the AO as well as the CIT(A) that the withdrawals made from capital account or current account with M/s ABC Engineering Works were mainly used for personal purposes and the funds were not used for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee s current account/capital account of the partnership firm has shown debit balance of ₹ 1,77,10,778/- as on 31.03.2006 which was increased to ₹ 7,04,16,001/- as on 31.03.2012. The AO verified the withdrawals made by the assessee and observed that the assessee has withdrawn huge amounts from the current account/capital account for personal / domestic purpose, other than for the purpose of the business. The AO furnished some instances of the application of funds from the withdrawals as under : F.Y.2006-07 Withdrawal for investment in Rameshwar Steel andPower Limited ₹ 1,80-,36,440/- F.Y.2007-08 Transferred to her personal account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no business carried on by the assessee and the assessee being partner of the firm, the interest and the losses takes the character of the share income from the firm which is exempt u/s 10(2A) of the Act for taxation and accordingly held that the loss or interest relatable on such share of loss is also exempt and cannot be included in total income. Accordingly the AO did not allow the assessee s claim of interest and recomputed the income rejecting the set off of business loss. 3. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) observed that the assessee had invested a sum of ₹ 1,80,36,440/- from the withdrawals from the capital account of the firm in equity share capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible for set off against the long term capital gains. The assessee has sold the residential property on 01.07.2011 and the withdrawals were used for the purpose of renovation of the house, therefore eligible for set off of loss against the capital gains income. Thus the Ld.AR requested to set aside the order of the Ld.CIT(A) and allow the appeal of the assessee. 5. On the other hand, the Ld.DR supported the orders of the lower authorities. 6. We have heard both the parties and perused the material placed on record. For the assessment year 2012-13, the assessee filed the return of income declaring total loss of ₹ 9,24,278/-. The assessee derived the income from house property of ₹ 1,26,000/-and the income from capital g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... head income from the property. The loss claimed by the assessee towards the interest payment to the firm is neither business loss nor the loss incurred for acquiring the property and not allowable deduction as per section 48 of the Act. 6.2. To allow the set off business loss against the current years income, the assessee has to establish that she has incurred the loss during the course of business. The AO as well as the Ld.CIT(A) have given finding that the borrowals were used for investment or for personal purposes but not for any business purposes. Further, the assessee has not furnished the details of withdrawals made from the current account of the partnership firm and matching utilisation of the funds with relevant statements of ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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