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TMI Blog2022 (6) TMI 1095X X X X Extracts X X X X X X X X Extracts X X X X ..... o equal extent. In our opinion decision cited by CIT(A) in the case of Dr. V.P. Gopinathan [ 2001 (2) TMI 10 - SUPREME COURT ] is clearly distinguishable on fact and not applicable in the present case - the assessee has proved direct nexus between borrowings and lending. Therefore we are not in agreement with the conclusion of learned CIT(A). Accordingly we set aside the order of learned CIT(A) and direct the Assessing Officer to allow deduction in respect of interest paid u/s 57(iii) of the Act while assessing interest income as income from other sources. Assessee appeal allowed. - I.T.A No.436/Mum/2019 - - - Dated:- 15-3-2022 - SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) AND SHRI GAGAN GOYAL (ACCOUNTANT MEMBER) Assessee: Shri Jitendra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Commissioner of Income Tax (Appeals) erred in holding that the interest expenditure incurred wholly and exclusively for the purpose of earning such interest income was not allowable under Section 57(iii) of the Act. Having regard to the facts and circumstances of the case, the Appellant submits that the interest expenditure incurred for earning such interest income be allowed while computing the income under the head Income from Other Sources . 3. Facts and finding on ground number one are as under: 1) The learned Commissioner of Income Tax (Appeals) erred in holding that the Appellant was not a running concern and that the only activity of the Appellant was to obtain an advance and to park such funds and in ignoring the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 5. The assessee, an LLP, is engaged in the business of property development since from its incorporation. The assessee LLP started developing a residential project known as Godrej Horizon at village Undri, Pune which was under progress during the year under consideration. The assessing officer, in the course of assessment proceedings, noticed that assessee has debited an amount of Rs.12, 87,432/- as finance cost in the Profit Loss Account and not debited the same to cost of construction. When confronted, the assessee explained that assessee LLP borrowed a sum of Rs.13 crores from its partner, Godrej Properties and had interest @12% p.a. as prescribed under section 40(b)(iv) of the Act and in terms of the Deed of Partnership. Out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have capitalized the entire finance cost of Rs.42, 56,083/-. He treated the interest income of Rs.12, 87,432/- as Income from other sources . On appeal, the Ld.CIT (A), following his predecessor s order for A.Y.2013-14, upheld the action of the assessing officer. 6. Further aggrieved, the assessee is in appeal before the Tribunal. 7. The learned counsel for the assessee submitted that the issue in appeal squarely stands covered by the decision of the Tribunal in assessee s own case for assessment year 2013-14. 8. The learned departmental representative, though agreed with the contention of the assessee, still, he relied upon the decision of the lower authorities. 9. We have considered the submissions made by either party. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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