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TMI Blog2023 (8) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the assessee that the funds received on which interest was paid were used for the purpose of granting the loan to its group concern on which interest was earned. Accordingly, interest expenditure is wholly and exclusively for the purpose of earning interest income. We direct the AO to grant the deduction of interest expenditure paid by the assessee, while computing the income under the head income from other sources . Decided in favour of assessee. - Shri B.R. Baskaran, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Nishit Gandhi For the Revenue : Shri Prashant Barate ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s well as section 142(1) of the Act were issued and served on the assessee. During the assessment proceedings, it was observed that the assessee has received only interest income of Rs. 5,54,257 from Maple Infra Projects and has no other business income as per the profit and loss account. It was further observed that out of the total expenses claimed by the assessee, it has claimed interest expenses of Rs. 4,05,206 paid to various parties. During the assessment proceedings, the assessee was asked to prove the nexus between the loans taken and given. In response thereto, the assessee provided the ledgers of the parties from whom the loan was taken and ledger of the party to whom the loan was given in order to establish the nexus. The Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 257 under the head income from other sources and against the said income, the assessee claimed an expenditure of Rs. 4,37,785, thus declaring total income of Rs. 1,16,472 under the head income from other sources . Further, from the financial statement of the assessee on page 29, we find that the assessee incurred interest expenditure of Rs. 4,05,206. As noted above, as per the assessee it has borrowed funds from several parties on which interest was paid and the said fund was given as a loan to its group concern on which assessee earned the interest income. As per the assessee, the differential amount was offered for taxation. In support of its submission, we find that the assessee has furnished the ledger confirmation of the loan credit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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