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TMI Blog2025 (3) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance of interest expenditure claimed by the assessee u/s 57. We accordingly set aside the order of the Ld. CIT(A) / NFAC and allow the grounds raised by the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. 195,618 5 Interest from Society maintenance 61,506 6 VM Matera 25,120 Total 10,318,929 Details of interest paid S.No. Particulars Amount 1 Interest on Service Tax 9,572 2 Interest on TDS 111,609 3 Interest paid to Vikas Sale 15,467,993 4 Interest paid to RIMTL 79,562 5 Interest paid to Vardaan Associates 79,562 6 Interst paid to Vardaan Properties Pvt. Ltd. 429,041 7 Interest on Magma Fincorp Ltd. 84,712 8 Interest on Maintenance Deposit 188,969 Total 16,451,020 5. The assessee further submitted that the amounts received from Vikas Deep Sales were given to Shubham Vipra Associates and Shubham Housing Developers Pvt. Ltd. in earlier assessment year i.e. assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per their needs whereas he has focused on direct entry wise nexus of borrowed fund and advanced funds which yielded interest income/expenses. 4. Alternatively, and without prejudice to Ground No. 1 to 3 above, appellant contends that appellant is eligible for deduction of interest expenses u/s 36(1)(iii)/37(1) of the I.T. Act, 1961 against business income. 5. The appellant craves leave to add, amend, alter or delete any one or more of the grounds of appeals as many be required in the nature and circumstances of the case. 6. The appellant prays leave to adduce such further evidence to substantiate her case as the Occasion may demand. 9. The Ld. Counsel for the assessee submitted that out of the amounts received from Vikas Deep Sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest has been paid and interest earned. He accordingly submitted that since there is direct nexus of earning interest and paying interest and in subsequent assessment year such interest expenditure claimed as deduction u/s 57 has been allowed, the disallowance of interest u/s 57 by the Assessing Officer and upheld by the Ld. CIT(A) / NFAC is not justified. 11. The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. 12. We have heard the rival arguments made by both the sides, perused the order of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue of large deduction claimed u/s 57 of the Act has allowed the claim of interest expenditure of Rs. 97,27,186/- as deduction by observing as under: "B) Large Deduction claimed u/s. 57 :- As per return of income for AY 2018-19, the assessee has claimed Rs. 97,27,185/- as Deduction u/s 57 under the head Income from Other Sources in Schedule OS of ITR. In this regard, vide notice u/s 142(1) of the IT Act, 1961 dated 24.11.2020, the assessee was asked to furnish the details with respect to the large deduction claimed u/s. 57 in the ITR In response, the assessee furnished a reply letter dated 09.12.2020 along with Computation of Total Income, Copies of Form No. 16 (4 Nos.) and Copies of bank account statements. The assessee has not furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,73,360 9 ii) Interest Deducted against Interest on Capital Associates) (Partnership Firm - Shubham Vipra 44,25,439 10 Interest claimed against House Property 5,24,319 11 Net interest Expenses available for Deduction 97,59,973 12 Interest Expenses Claimed as Deduction 97,27,186 In this connection, the assessee furnished the relevant ledger confirmation of the parties from whom the interest has been earned along with their ITR-V etc and verified. Further the assessee vide reply letter has substantiated that the interest expenses incurred by the assessee is being utilized for earning the interest income which is according to the principle laid down w/s. 57 which states that the expenditure must be laid out or expended wholly and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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