9911796707
TMI Blog2022 (6) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... crucial and the issue may be remitted back to decide the same in the light of above additional evidence. We exceed to the prayer of the Ld.AR accordingly, this issue in dispute is remitted to the AO to examine the nexus between the debenture issued and loans advanced and decide accordingly. This ground of appeal is treated as allowed for statistical purposes. Disallowance of loss on reasons of non-set up of business - whether the business of the assessee has been set up or not, the assessee has to establish that the company has been already set up for the purpose of carrying on its business operation? - HELD THAT:- The assessee in this case, not established that the assessee is already set up in the business so as to commence its comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngalore, dated 25-01-2018 for the AY.2015-16. This is the recalled matter vide M.P.No.116/Bang/2019, order dt.17.03.2020. The Revenue appeal in ITA No.2825/Bang/2018 is already dismissed vide order dt.17.07.2019. The assessee raised the following grounds of appeal: 1. The Commissioner of Income-tax (Appeals) erred both in law and in the facts of the case in sustaining the following additions: Rs. Disallowance of business loss 37,32,655 Disallowance of deduction claimed u/s.57(3) 95,73,377 --------------------- Total : 1,33,06,032 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure is for the purpose of earning interest income. The assessee was under bonafide belief that the entire interest expenditure will be allowed as deduction. However, Ld.CIT(A) in his order accepted the claim of assessee to the extent of interest paid on loans and not debenture issued. Therefore, now the assessee has been advised to file the above document to prove direct nexus between debenture issued and loans advances. The above document should go to the root of the matter to prove the nexus between the borrowings and the lending. Hence, it was prayed by the Ld.AR that these additional evidences should be taken for the purpose of fair adjudication of the issue in dispute. 4. The Ld.DR did not raise any strong objection with rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceed to the prayer of the Ld.AR accordingly, this issue in dispute is remitted to the AO to examine the nexus between the debenture issued and loans advanced and decide accordingly. This ground of appeal is treated as allowed for statistical purposes. 7. Next ground for consideration is with regard to disallowance and loss of Rs.37,32,655/- on reasons of non-set up of business. From the financials on record, it is observed by the AO that the assessee has not shown any revenue from operation for the year or last year as under: FY.2014-15 FY.2013-14 Income 36,94,973 (interest income under income from other sources) NIL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenditure incurred before set up of business cannot be allowed as business expenditure in the assessment year under consideration and to be capitalised. 9. We have heard both the parties and perused the material on record. To decide whether the business of the assessee has been set up or not, the assessee has to establish that the company has been already set up for the purpose of carrying on its business operation. The assessee in this case, not established that the assessee is already set up in the business so as to commence its commercial operations and not placed any evidence to suggest that the assessee has set up the business. The financial statement clearly shows that no business has been commenced in the assessment year un ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
