9911796707
TMI Blog2020 (7) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... m house property. However when such bonds have been redeemed and utilized for the purpose of purchase of the property, then the borrowed fund from HSBC bank amounts to utilization of same for the purpose of purchase of the property. As held that since the amount was purchased from the borrowed funds of the HSBC bank, interest paid by the assessee should be allowed as a deduction. The above facts are not disputed by the revenue. Even it was not shown to us that the order of the learned CIT A for assessment year 2011 12 has not been accepted by the revenue and is agitated before the higher forum. In view of this, we do not find any infirmity in the order of the learned CIT A in directing the learned assessing officer to ascertain the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed. Addition on account of various business expenses claimed - HELD THAT:- On careful analysis of the order of the learned CIT A, we found that he relied on the order of his predecessor for assessment year 2011 12 wherein all the facets of the allowability of those expenditure have been considered and disallowance has been deleted. We also do not find any infirmity in the order of the learned CIT A in following the order of his predecessor, when revenue could not produce any evidence before us that the order of the CIT A for assessment year 2011 12 has not been accepted by the revenue. - Decided against revenue. - Shri Bhavnesh Saini, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Shri Gautam Jain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious business expenses claimed by the assessee without considering the fact that the assessee had not carried out any business activity during the relevant period and also by ignoring the fact that the assessee failed to justify that expenses were incurred wholly and exclusively for the purpose of business? 3. Brief facts of the case shows that assessee is a company carrying on the business of builders, colonizers developers and to act owners. However, the AO found that company is dealing mainly in mutual funds and had purchased commercial property at Mumbai for earning rent. The assessee filed its return of income on 30 11 12 declaring nil income. The assessee has earned rental income of ₹ 1.24 crores, professional receipts of 79,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned assessing officer found that assessee has paid interest of ₹ 1 5433735 to HSBC bank Ltd on loan borrowed against bonds. He noted that it clearly shows that no part of the loan was borrowed for acquisition of the property but was used for further investment in various bonds invested by the assessee company. Therefore, he held that, as the assessee has not invested any fund for purchase and acquisition of the property but used loan for investment in the bonds, income from which has been claimed as exempt income. Therefore the above interest expenditure cannot be allowed as a deduction under section 24 (b) of the income tax act. 6. The learned CIT A found that the above issue has already been decided by his predecessor in assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that until the amount has been utilized in the investment of bonds et cetera, no interest can be claimed by the assessee as deduction under the income from house property. However when such bonds have been redeemed and utilized for the purpose of purchase of the property, then the borrowed fund from HSBC bank amounts to utilization of same for the purpose of purchase of the property. Therefore, he held that since the amount was purchased from the borrowed funds of the HSBC bank, interest paid by the assessee should be allowed as a deduction. The above facts are not disputed by the revenue. Even it was not shown to us that the order of the learned CIT A for assessment year 2011 12 has not been accepted by the revenue and is agitated bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t expenditure, which pertains to the income from house property and in respect of the interest expenditure related to the income from other sources. He was directed to consider the remaining interest expenditure for the purpose of computation of the disallowance. With respect to the disallowance of 0.5% of the average value of the investment, he directed the learned assessing officer to consider only those bonds, which yielded tax-free income. After hearing the parties on this issues, we do not find any infirmity in the order of the learned CIT A in directing the AO so. Furthermore, the learned CIT A has followed the order of his predecessor and honourable Delhi High Court. The revenue has not challenged the order of the learned CIT A for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
