AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 1606
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....eals, the common issue involved is against confirming the disallowance on interest payment claimed U/s 57 of the Act. In this regard, the brief facts of the case are that the assessee has taken the one time loan from State Bank of India - Bhilwara on account of House Loan for house construction and concerned bank have charged and levied the interest amount of Rs. 695008/-, however, the assessee has claimed the said interest as deduction U/s 57 of the Income Tax Act 1961 against interest income of Rs. 8629517-which was received from various parsons and parties to whom the advances were given on interest towards. It was contention of assessee that one time house loan taken and received from the bank directly been transferred from bank channel to parties in respect to earning the interest on higher rates. Being not convinced with the assessees' contention, the Assessing Officer disallowed the interest expendi ture U/s 57 of the Act. 5. By the impugned order, the ld. CIT(A) has confirmed the disallowance made by the Assessing Officer, by observing as under: "4.3 I have gone through the assessment order, grounds of appeal, written submission, remand report and rejoinder carefully. It....
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....e appeal no 99/2014-15 dated 26.09.2016 and submit repeating to the same there are no change in nature and income as well of expenses made on account of interest paid to bank on loan account name known as House Loan and specially In the year under review there the construction work of residential house completed and the assessee appellant and her family shifted and occupied for self residence and some portion of newly buildup house here to have let out and income thereof also been shown under the head of income from house property. There for in our case the assessee appellant also entitle to get the deduction from the head of income from house property U/s 24 but the ld. A.O. hereto not given the deduction narrating to the bias language in the order the assessee has not made any claim U/S 24 of the income tax act 1961. That in our case the assessee appellant here to rightly claimed the deduction U/S 57 which made the same on account of interest paid to bank loan taken for purpose of construction of house property and simultaneously directly the same loaning fund here to utilized for earning of interest/ income but having of pre determined views the Ld. A.O added the amount of....
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.... V/s Madras Fertilisers Ltd (1980) 122 ITR 139 (Mad.), Vijaya Laxmi Sugar Mills Ltd V/s CIT (1991) 191 1TR 641 (SC), CIT V/s Dwarka Chit Funds P Ltd (1996) 132 Taxation 109 (Mad.), CIT V/s K P Madan Mohan (1997) 136 taxation 506 (Mad.) There For to going on the facts of the case the assessee appellant here to rightly claimed the deduction U/S 57 on account of interest paid amount of Rs. 695008/- to bank on account of fully sanctioned loan account which diverted and transferred on account of advances given to parties and persons for earning the income as interest fully entitled to get the deduction U/S 57 and hoping with we warmly request kindly given the relief to the total tune of amount of Rs. 695008/- which is extremely genuine and on fact true and correct expenditure here to have claimed against earning of interest and another income. " 8. During the course of appellate proceedings, further evidences filed by the assessee were forwarded to the Assessing Officer for his remand report. After receipt of remand report, the assessee was called to file rejoinder. The rejoinder was also filed by the assessee, which reads as under: "With respect in regard of remand report/ comme....
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....case about the relevant matter which made of their own opinion without based of the record and having of purely of predetermined views the unlawful addition was made against which your good self kind honor given the full relief. Further submit there no changes in facts of any type extra ordinary here to made in the year under review specially of the head of Loans & Advances slightly reduced and similar to the tune of amount of Rs. 5710284/- in comparison of last year amount of Rs. 7309320/- and according to this effect the interest income comes Rs. 862951/- in compare of last year income of Rs. 858067/- and simultaneously to this effect prima facie shows on fact the recoveries from the loans and advances of Rs. 1599036/= (7309320- 5710284) plus to adding of this years surplus income out of them diverted to construction of house it means this year expenses amount of Rs. 1086177/- similar to proved the source of investment in buildup of residential house hence we disagree with the views of the Ld A.O specially of the words mentioned in the remand report "not availability of the funds for spent". Point No 3.2, 3.3 & 3.4 The total lacunas mentioned in the remand report of the A. ....
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....ith warmest regard kindly allow the appeal to considering the facts of the case based on the genuine facts , transactions and explanation through record maintained and request to delete the addition in whole amount of Rs. 695008/- which claimed as expenditure U/S 57 of the Income Tax Act 1961." 09. I have carefully gone through the orders of the authorities below and I found that the assessee has availed housing loan from State Bank of India. The fact that the interest was charged with respect to the loan so taken, had not been denied by the Assessing Officer. The Assessing Officer has declined claim of deduction of interest on the plea that the assessee has claimed the same U/s 57 of the Act against the interest income received by him and not under the head of income from house property. Merely because the assessee has not claimed interest expenditure against the income from house property and claimed the same against the interest income earned by him will not disentitle the assessee to claim the same against such interest income which has been earned out of advances so made. 10. There is no dispute to the well settled legal proposition that the expenditure incurred for earning....