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TMI Blog2019 (12) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... orrowings should be deducted as an expenditure U/s.57 from the interest income as it was incurred wholly for earning such interest income - HELD THAT:- There are merits in the grounds raised by the assessee - the issue is remanded back to the Assessing Officer to verify and assess the net interest income. The appeal of the assessee is treated as partly allowed for statistical purpose. - I.T.A. No. 2538/CHNY/2017 (Assessment Year : 2 013 -1 4) - - - Dated:- 8-11-2019 - SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER Appellant by: Shri Saroj Kumar Parida, Advocate Respondent by: Shri S. Bharath, CIT ORDER Per S. Jayaraman, AM: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Appeals) is contrary to law, facts and circumstances of the case. 2. The CIT(A) erred in holding that the interest on short term deposits made from borrowings, interest on deposits placed as margin money for letter of credit and bank guarantee issued by bankers was assessable under the head income from other sources. 2.1 The CIT(A) ought to have appreciated that these borrowings was intended for specific purpose of acquisition of machinery and till such time they were utilized in purchasing the assets, the funds were temporarily kept in short term deposits. 2.2 The Appellant submits that the interest was received from deployment of funds specifically for setting up of the Industry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 210 Taxman 358 (Delhi) iv) CIT Vs Jaypee DSC Ventures Ltd. 335 ITR 132 v) CIT Vs UK Bose J B Roy 2012-TIOL-1010 vi) POSCO-India Pvt Ltd. Vs DClT 2013-TIOL-225-ITAT-CUTTACK vii) Adani Power Ltd Vs AClT 2015-TIOL-1327-ITAT-AHM viii) Shapoorji Pallonji Power Co Ltd Vs ITO 2009-TIOL-528-ITATMUM 3. Without prejudice to the above claim, the CIT(A), in any event, should have found that the interest paid on borrowings should be deducted as an expenditure under Section 57 from the interest income as it was incurred wholly for earning such interest income 4. The Appellant craves leave to adduce additional grounds at the time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Sec.56 or any other provision. The Income-tax law does not march step by step in the footprints of the accountancy profession. Therefore, we do not find any merit in the submissions of the assessee upto ground No.2. However, the assessee s plea in Ground No.3 viz., that the interest paid on borrowings should be deducted as an expenditure U/s.57 from the interest income as it was incurred wholly for earning such interest income, merits. Therefore, we remit his issue back to the Assessing Officer to verify and assess the net interest income. The assessee shall lay all materials in support of its contention before the Assessing Officer and comply with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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