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TMI Blog2023 (7) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is not required, once again, to demonstrate commercial expediency in each year. The AO seems to have disregarded this aspect in the AY in issue. Whether revenue incur any loss of revenue whether interest is allowed in the hands of the respondent/assessee i.e., the partnership firm or its partner? - The revenue cannot but accept that the interest expenditure is revenue neutral. In case this was to be disallowed in the hands of respondent/assessee i.e., the partnership firm, it would have to be allowed in the hands of the partners. - ITA 354/2023 - - - Dated:- 10-7-2023 - HON'BLE MR. JUSTICE RAJIV SHAKDHER AND HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA For the Appellant Through: Mr Sanjay Kumar, Sr Standing Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extended to each of the partners. 8. The respondent/assessee, being aggrieved by the order, preferred an appeal with the Commissioner of Income Tax (Appeals) [in short, CIT(A) ]/ CIT(A), via order dated 03.04.2019, reversed the view taken by the AO. 9. The appellant/revenue carried the matter in appeal to the Income Tax Appellate Tribunal [in short, Tribunal ]. The Tribunal concurred with the CIT(A) and dismissed the appeal of the appellant/revenue. 10. Mr Sanjay Kumar, learned senior standing counsel, who appears on behalf of the appellant/revenue, submits that it was incumbent on the respondent/assessee to demonstrate commercial expediency and, having failed to do so, the interest expenditure was rightly disallowed by the AO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. The CIT(A), however, made a course-correction by reversing the view of the AO even for those years. The Tribunal has sustained the view taken by CIT(A) in AY 2015-16, which is the AY under consideration in the instant appeal lodged before us. 14. Given this backdrop, the moot point which arises for consideration is, two-fold. 15.1 First, does the respondent/assessee need to demonstrate commercial expediency in each year concerning a loan transaction which took place in and about AY 2005-06? 15.2. Secondly, ultimately, would the appellant/revenue incur any loss of revenue whether interest is allowed in the hands of the respondent/assessee i.e., the partnership firm or its partner? 16. The answer to the first question is obvio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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