9911796707
TMI Blog2024 (8) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has to prove that the funds on which he has paid interest and claimed deduction were actually utilized for giving loans so as to satisfy the requirement of wholly and exclusively for the purpose of making or earning income as per section 57(iii). In present case, there is no submission by assessee to prove this factum. Therefore, the assessee is required to submit clinching particulars to AO in this regard. AO has disallowed interest deduction claimed by assessee fully as if the assessee has not utilized a single pie of borrowed funds for giving loans. Apparently, this approach of AO is also not correct. So far as other expenses, namely Legal expenses, Bank charges and Brokerage are concerned, there is no submission from assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for AY 2020-21 showing a total income of Rs. 82,15,509/- comprising of taxable salary of Rs. 1,21,48,336/-, loss from house-property of Rs. 30,000/-, loss from other sources of Rs. 37,41,259/- and deductions under Chapter VI-A of Rs. 1,61,568/-. The assessee declared loss of Rs. 37,41,259/- from other sources as under: Income from Other sources (Chapter IV F): Interest from Saving Bank A/c 1,20,315 Interest Item 21,09,764 22,30,079 Less: Interest Paid 51,28,176 Legal Expenses 7,80,106 Bank Charges 15,756 Brokerage 47,300 59,71,338 (-)37,41,259 3. The case of assessee was selected for scrutiny and notices u/s 143(2)/142(1) were issued from time to time. During assessment-proceeding, the AO called assessee through various notices dated 29.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Variation in respect of issue of disallowance of deduction claimed u/s 57 59,71,338/- 4. Variation in respect of issue of interest income 22,30,079/- 5. Total income/Loss determined as per the above proposal 1,64,16,927/- 4. Aggrieved the assessee carried matter in first-appeal and made submissions but the CIT(A) was not convinced with assessee s submissions. Thus, he did not grant any relief to assessee. Still aggrieved, the assessee has come in next appeal before us. 5. The assessee has raised following grounds: 1. That the Ld. CIT(A) erred in confirming disallowance made by the Assessing Officer of Rs. 59,71,338/- u/s 57 of the Income-tax Act, 1961, on account of interest expense, legal expenses, bank charges and brokerage expenses. 2. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20 956/Ind/2019 of Smt. Padma Kalani (case of assessee s family member), Ld. AR submitted that the ITAT allowed deduction of interest paid by assessee at a higher rate of 12% to 15% per annum as against interest received @ 6% per annum. Ld. AR also submitted that the assessee has consistently claimed deductions u/s 57 year after year and the department has always allowed. In support of this fact, Ld. AR has filed copies of returns filed by assessee for earlier AYs 2012-13 and 2013-14. Lastly, Ld. AR contended that it is well-accepted view in several decisions that even if the final outcome of computation is a loss, the deductions cannot be denied. 8. Per contra, Ld. DR for revenue drew our attention to assessment-order and submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 37,41,259/- ultimately set off against salary income. In terms of legal provision of section 57(iii), the deductions claimed by assessee are allowable only if the relevant expenses have been laid out or expended wholly and exclusively for the purpose of making or earning interest income. Apparently, the deduction of Rs. 59,71,338/- claimed by assessee is about 2.68 times of interest income of Rs. 22,30,079/- and thus there is a wide-gap. There can hardly be any dispute that it is assessee s burden to provide sufficient details to show that the expenses were incurred wholly and exclusively for the purpose of making or earning interest income. So far as deduction of interest expenditure of Rs. 51,28,176/- is concerned, Ld. AR/assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has disallowed interest deduction of Rs. 51,28,176/- claimed by assessee fully as if the assessee has not utilized a single pie of borrowed funds for giving loans. Apparently, this approach of AO is also not correct. So far as other expenses, namely Legal expenses of Rs. 7,80,106/-, Bank charges of Rs. 15,736/- and Brokerage of Rs. 47,300/-, are concerned, there is no submission from assessee s side before lower-authorities or even before us. Therefore, the case of assessee can be carried to a proper conclusion only if complete particulars of all deductions are available and the AO examines the same from the touchstone of section 57(iii). Being so, we have no option except to remand this matter back to the file of AO for a fresh adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
