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TMI Blog2020 (10) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to this effect that the interest paid is for the purpose of earning interest. CIT(A) should not have remanded the matter to the file of AO which in our opinion is contrary to the jurisdiction available to CIT(A). Before us, the ld. AR pointed that the assessee had mixed funds to an extent of ₹ 27.48 crores and no break up to that effect filed before us. In such a situation we deem it proper to remand the matter to the file of CIT(A) to verify the nexus between loans advanced and interest paid for the purpose of interest earning in terms of Clause (iii) of section 57 of the Act. Thus, the order of CIT(A) is set aside and the assessee is liberty to file all evidences if any in support of its claim in terms of Clause (iii) of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- from flat holders is only business income. He was of the opinion that the interest income earned on loans and advances cannot be claimed as business expenditure from the profit declared u/s. 80IB(10) of the Act and treated the same as income from other sources, held chargeable to tax. Before the CIT(A) the assessee contended that the funds advanced to its associate concerns are out of borrowed funds on which the assessee has paid interest, the interest expenses incurred thereon is an allowable expenditure. Considering such submissions the CIT(A) directed the AO to verify and compute the exact quantum of deduction under Clause (iii) of section 53 of the Act. The relevant portion of which is reproduced here-in-below : 5.4 I have pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claim of the Appellant regarding the interest paid. The AO is directed to verify and compute the exact quantum of deduction u/s 57(iii) of the I.T. Act, 1961. The AO is also directed not to treat this quantum of deduction allowed u/s 57(iii) of the I. T. Act as business expenditure. This Ground is allowed for statistical purpose. 4. The ld. DR, Shri Abhishek Meshram submits that the assessee for the year under consideration shown gross total income of ₹ 12,13,57,416/- which comprises business income as well as income from other sources. The assessee claimed deduction u/s. 80IB(10) of the Act to an extent of ₹ 11,89,51,169/-. The assessee earned gross interest income of ₹ 2,08,49,311/- from M/s. Mahanagar Estate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the two lower authorities that the term loan has been obtained for the purpose of business and the same was not utilized for the purpose of business as it had enough capital. In our opinion the term loans are obtained for specific purpose, since the assessee is in the business of housing construction, the said term loan should have been used for the purpose of said business but however as noted above having enough capital and advances from customers the term loan fund advanced to its associate concerns and earned interest income. The CIT(A) having examined the case of assessee held that the assessee is entitled to get deduction under Clause (iii) of section 57 of the Act but however without there being concrete finding to this effect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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