TaxTMI 
TaxTMI 
2017 (6) TMI 558
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....09. Shri A.K.Tibrewal, Ld. Authorized Representative appeared on behalf of assessee and Shri Rajat Kr. Kureel, Ld. Departmental Representative represented on behalf of Revenue. 2. Ground No. 1 to 4 are inter-related and therefore being taken up together to pass a consolidated order for the sake of brevity. The issue raised by assessee in this appeal is that Ld. CIT(A) erred in upholding the order of Assessing Officer by sustaining the disallowance of Rs.52,01,397/- on account of interest on the borrowed fund utilized for the purpose of investment in property. 3. Briefly stated facts are that assessee is a limited company and engaged in the vehicle business. The assessee for the year under consideration has claimed interest expense of Rs.....
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....siness of dealing in immovable properties since last several years and also produced some details of small transactions which were entered pertaining to financial year 1992-93 to 1995-96. Therefore, I am of the firm opinion that appellant is not doing business of immovable properties in true spirit. It is a common feature that every company is having property transactions in addition to their business. In order to avail deduction u/s. 36(1)(iii) the following condition must be satisfied; i. The assessee must have borrowed money. ii. The money so borrowed must have been used for the purpose of business. iii. Interest is paid or payable on such borrowings. It is needless to say that the appellant has fulfilled the above conditions....
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....ces of the case the Ld. Commissioner of Income Tax (Appeals) erred in confirming the disallowance of Rs. 52,01,397 made by the Ld. Assessing Officer out of interest paid on borrowings on the alleged ground that part of the borrowed funds were used for investment in property. 2) That although the explanation of the Appellant Company, that the investment in properties were made out of own funds and not out of borrowed funds, was supported by evidences on record, the Ld. Commissioner of Income Tax (Appeals) erred in rejecting the said explanation by wrongly and arbitrarily alleging that the explanation is vague and does not hold much water. 3) That there being no finding by Revenue in any year whatsoever, that the borrowed funds were eve....
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....ming from the earlier years and in the year under consideration advance for Rs.1,36,95,000/- only was made. Ld. AR for the assessee in support of assessee's claim drew our attention on the amount of opening balance and the advance given in the current year which is placed on page 97 of the paper book. On the other hand, Ld. DR before us submitted that nexus between borrowed fund/ own fund vis-à-vis to the investment in impugned property should be established by the assessee and onus lies upon the assessee to demonstrate that no borrowed fund has been utilized in the investment of impugned property. He vehemently relied on the order of Authorities Below. 6. We have heard rival contentions of the parties and perused the materials avai....