2017 (4) TMI 528

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....wal, learned counsel appearing for the appellant has pressed the following two substantial questions of law:- "(i) Whether the ITAT was justified in adjudicating the claim of loss of Rs. 4,50,675/- a purchase and sale of cotton which was not an issue in the reason recorded for initiation of 148 proceedings ignoring the decision of Vipin Khanna Vs. CIT (2002) 255 ITR 220 P & H and Prashant S. Joshi Vs. ITO (Bom.) (2010) 324 ITR 154 (Bom.). (ii) Whether the ITAT was right in confirming the dis-allowance of interest of Rs. 5,93,644/- when the loan was used for business purpose and all the conditions of Section 36(1)(iii) of the Act was fulfilled as held in case CIT Vs. Radico Khaitan Ltd. (2005) 274 ITR 354 (Alld.)?" 4. In....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ings. 7. The aforesaid provision gives the Assessing Officer ample authority not only to assess or reassess the income for which he has reason to believe that it has escaped assessment but also any other income chargeable to tax but has escaped assessment if it comes to its notice during the reassessment proceedings and for which there may not be any reason assigned. 8. It is not the case of assessee that during the course of proceedings there was no material before the assessing authority to establish escapement of income chargeable to tax in addition of the reasons to believe recorded. 9. Sri Suyash Agarwal, learned counsel in this connection has placed reliance upon the Division Bench decision of this court dated 18.02.2015 pass....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....taken loan for business purposes from various sources including U.P.F.C. and Bank of Baroda and had paid interest thereon amounting to Rs. 5,93,644/-. It claimed deduction of the said amount under Section 36(1)(iii) of the Act but the authorities denied the said deduction on the ground that the assessee has given interest free advances to its partners which means that it had surplus money which could have been utilised to clear off the loan so as to reduce the interest liability. 15. In order to get the benefit under Section 36(1)(iii) of the Act it is settled in law that only three factors are relevant namely that the assessee had borrowed money for business purpose; it has utilised it for the business; and that it had paid interest on ....