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TMI Blog2022 (7) TMI 1403X X X X Extracts X X X X X X X X Extracts X X X X ..... s and advances, the corresponding interest cannot be allowed as deduction against the interest income. It is for the reason that there is no direct nexus between the interest income and the interest expenses. Such interest expenses cannot be allowed as deduction either under the provisions of section 36(1)(iii) or 57 of the Act. In view of the above, we set aside the order of the CIT (A) with the direction to the AO to calculate the amount of interest attributable to the investment made in the lands and interest-free loans and advances and make the disallowance proportionately. Hence the ground of appeal of the assessee to this extent is partly allowed. Unexplained cash expenses - assessee has incurred certain expenses on purchase of property such as stamp duty charges and registration charges but failed to explain the source of such expenses - HELD THAT:- We note that all the cash expenses incurred by the assessee have been duly incorporated in the cash book. No doubt raised by the authorities below with respect to the cash book filed by the assessee. Since, the expenses incurred in cash have been duly recorded in the books of accounts, the source of cash for such expenses cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2012-2013. 2. The assessee has raised the following grounds of appeal: 1.1 The order passed u/s.250 on 21.08.2016 for A.Y.2012-13 by CIT(A)-5,Abad, confirming disallowances made by AO towards interest expenses Rs,9,59,093, addition towards stamp duty & registration expense of Rs.7,22,272 and motor car expense of Rs.1,23,960 is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced. The Ld. CIT(A) has erred in passing a non-speaking order and merely confirming the findings given by AO. 2.1 The Ld. CIT(A) has grievously erred in law and or on facts in making following disallowances : a) Disallowance of interest Rs.9,59,093/- b) Undisclosed cash expenses Rs.7,22,272/- c) Disallowance of car expenses Rs.1,23,960/- 2.2 That in the facts and circumstances of the case as well as in law, the Id. CIT(A) has grievously erred in confirming impugned disallowances as above. It is therefore prayed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owings from the family members and the said investment. It is also contended that appellant had not used the interest bearing funds towards the purchase of aforesaid lands. 4.3.2. Facts of the case and the submissions arc considered. The AO has discussed the issue in detail in his order and established that the interest payment is not allowable u/s.36( 1 )(ii) of the Act. However, the AO has failed to appreciate that no disallowance could be made with regard to the opening balances unless there was a finding in the year of borrowing about the non-business purposes. Therefore, the AO is directed to verify the same from the records and restrict the disallowance with regard to interest payment on funds received during the year only. Thus the ground of appeal is partly allowed for statistical purposes. 6. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 7. The learned AR before us filed a paper book running from pages 1 to 43 of the paper book and contended that the interest expenses was incurred for the purpose of the business and therefore the same is eligible for deduction. 8. On the other hand the learned DR vehemently supported the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preferred an appeal before the learned CIT-A, who confirmed the order of the AO by observing as under: 4.4. With regard to undisclosed cash expenses, the AO has disallowed expenses towards stamp duly and registration charges, amounting to Rs.7,22,272/- tor purchase of land on the ground that these were not reflected in the bank account or capital account. The appellant has contended that the AO has failed to appreciate that the aforesaid expenses were duly accounted for in the books of the appellant in as much as the said expenses were debited to the respective land account as evident from the copy of ledger account. 4.4.1. Facts of the case and [he submissions are considered. These payments were made in cash and the assessee has failed to substantiate the source of such cash available with him. The AO has rightly disallowed the same. Thus the ground of appeal is dismissed to this extent. 13. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 14. The learned AR before us filed a paper book running from pages 1 to 43 and contended that the impugned expenses were duly recorded in the books of accounts. The learned AR in support of his c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounting to Rs.1,23,960/- on the ground that the.se expenses are purely personal in nature. The AO has observed that assessee is not carrying out any business activity on his own. The appellant has contended that the disallowance is not justified because the business of the firm is the business carried on by it partners and when the personal asset is used for the purpose of business of the firm its expenses would be admissible against the share income from the firm. 4.5.1. Facts of the case and the submissions are considered. There is no force in the argument of the appellant and the disallowance made by the AO is justified and the same is confirmed. 20. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 21. The learned AR before us filed a paper book running from pages 1 to 43 and contended that the assessee is a partner in many partnership firm and drawing income therefrom which is chargeable to tax under the head business and profession except share of profit. Thus, it cannot be said that the assessee does not have any business income. 22. On the other hand the learned DR vehemently supported the order of the authorities below. 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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