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TMI Blog2023 (9) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute with respect to the interest paid to the unsecured loan creditors on the opening balances and further the revenue has been accepting the interest claim in earlier years. Accordingly, the order of the CIT(A) on this disputed issue is set aside and direct the Assessing officer to delete the disallowance of interest on unsecured loans For interest on housing loan paid to LIC Ltd and HDFC Ltd - AR filed the evidences of interest paid to LIC Ltd loans and supported with the loan repayment and loan interest receipts and in the case of HDFC Ltd, statement of account was filed. Considering all there is no dispute that the assessee has let out the property and derived the rental income and the assessee has substantiated the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action of the Assessing Officer in disallowing interest of Rs. 37,965 paid against loan from LIC and loan from HDFC without appreciating that the said loans were obtained in connection with acquisition of the industrial units, and interest was allowed against income from house property. 4. Your Appellant craves leave to add to, amend, alter, modify and / or delete any grounds of appeal at or before final disposal of appeal the above 2. The brief facts of the case are that the assessee is an individual and Prop. of M/s Vartsila, which is a dealer of pressure reducing valves. The assessee has filed the return of income A Y 2012-13 on 19.09.2012 disclosing a total income of Rs. 10,23,840/- and the return of income was processed u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and has discussed on the issues at Para 9 to 14 of the order and passed the order u/s 143(3) r.w.s 254 of the Act. 9. In the earlier previous year the assessee claimed interest payment of Rs. 1,88,080/- As regards of the payment of interest of Rs. 6,48,422/- the same has been explained for the following reasons: Sr. No Head Amount in Rupees Remarks 1 Bank Charges 13,833 Regular charges levied by the bank 2 Interest on Citibank loan 3,91,288 Taken partially to find the business and partially for property acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set also and the industrial unit acquired by the assessee jointly with his wife have been merely let out. The income from the let out property is claimed as income from House Property only. 12 In view of the foregoing paragraph out of interest disallowance of Rs. 6,48,422/- and Rs. 2,43,251/- paid for unsecured loan is disallow considering the debit balance of assessee in capital account Rs. 41,20,030/- for the reason Interest bearing fund have been utilized for non-business purpose. 13 As regards to the interest paid to Citi Bank loan account 3,91,288/- considering the ITAT observation in its order the assessee has filed enough evidences to prove the loan has been partially borrowed for the purpose of business. In view of the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs of the AO and has granted partial relief and partly allowed the assessee appeal. Aggrieved by the CIT(A)order, the assessee has filed an appeal before the Hon ble Tribunal challenging the sustainment of disallowance of interest expenses of Rs. 2,43,521/- and disallowance of interest paid to LIC Ltd and HDFC Ltd Rs. 37,965/-. 5. At the time of hearing, the Ld. AR submitted that CIT(A) has over looked the facts that the interest on unsecured loans disallowed by the AO, is in respect loans obtained in earlier years and interest was paid subject to TDS. Further the assessee has paid interest on housing loans obtained from LIC Ltd and HDFC Ltd and are supported by the evidences and the assessee also has own funds which are utilized. The Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oan funds were utilized wholly and exclusively for the purpose of business. The Ld.AR emphasized that the own funds are more than the loan funds and relied on the judicial decisions. Considering the facts, circumstances and the information filed in the course of hearing find that there is no dispute with respect to the interest paid to the unsecured loan creditors on the opening balances and further the revenue has been accepting the interest claim in earlier years. Accordingly, the order of the CIT(A) on this disputed issue is set aside and direct the Assessing officer to delete the disallowance of interest on unsecured loans of Rs. 2,43,521/- . 7. On the second disputed issue, with respect to interest on housing loan paid to LIC Ltd Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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