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TMI Blog2019 (11) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... e for acquisition/construction of property in question, the claim of the assessee that the borrowed fund was utilized for repayment of the earlier loan taken for the purpose of construction of the property cannot be accepted. Therefore, this issue requires a proper verification of facts regarding the funds utilized by the assessee for the purpose of acquisition/construction of the property in question and in case, the earlier loan was utilized by the assessee for the construction/acquisition of the property then to the extent of such loan utilized for the purpose of construction of the property and repayment of the same by the subsequent loan would be eligible for claim u/s 24(b) of the Act. In absence of the verification of the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8/- by disallowing of interest paid u/s 24(b) on borrowed funds on property let out to M/s Idea Cellular Ltd. 2. The assessee craves your indulgence to add amend or later all or any grounds of appeal before or at the time of hearing. 2. The assessee has also raised an additional ground, which reads as under: In the facts and circumstances of the case, the ld. A.O. as well as the ld. CIT(A) has erred in not allowing the payment of interest u/s 36(1)(iii) of the Income Tax Act, 1961 and also allow the setoff of business losses against other heads of income for the same year. 3. On the admissibility of additional ground, the ld AR of the assessee has submitted that this issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d raised by the assessee is admitted for adjudication on merits. 6. The main ground of the appeal is regarding disallowance of interest U/s 24(b) of the Act. In the return of income, the assessee has shown rental income of ₹ 18,97,500/- in respect of the property let out to M/s Idea Cellular Limited. The assessee claimed deduction U/s 24(b) of the Act of ₹ 11,91,668/- on account of interest paid on borrowed funds. The A.O. after considering the details of the borrowed funds, have arrived to a conclusion that the borrowed funds were not utilized for acquisition and construction of the property in question which was let out by the assessee and earned rental income. Therefore, the interest payment of ₹ 11,91,66 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee s own surplus fund were utilized for the purpose of making investment in the shares to the extent of ₹ 87.00 lacs. The ld AR has submitted that even if part of the borrowed fund is utilized for the investment in shares, the interest in respect of such fund is an allowable business expenditure and in absence of business income, the business loss is allowable to set off against the other income. In support of his contention, he has relied upon the decision of the Coordinate Bench of the Jaipur ITAT in the case of M/s Jaipur House (P) Ltd. Vs The ITO in ITA No. 488/JP/2012 order dated 31/08/2012. 8. On the other hand, the ld DR has submitted that the assessee has not given bifurcation of the funds utilized for repayme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding on the part of the A.O. that whether the earlier loan was taken for the purpose of acquisition/construction of the property in question, therefore, until and unless, this fact is verified that the earlier loan was taken and utilized by the assessee for acquisition/construction of property in question, the claim of the assessee that the borrowed fund was utilized for repayment of the earlier loan taken for the purpose of construction of the property cannot be accepted. Therefore, this issue requires a proper verification of facts regarding the funds utilized by the assessee for the purpose of acquisition/construction of the property in question and in case, the earlier loan was utilized by the assessee for the construction/acquisition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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