2018 (7) TMI 874

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....dated 31.12.2012 passed by learned Assessing Officer (hereinafter called "the AO") u/s 143(3) of the Income-tax Act, 1961 (hereinafter called "the Act") for AY 2010-11. 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called "the tribunal") read as under:- "1. The learned CIT (A) erred on the facts and in law in rejecting the appellants claim on treating expenditure on Interest payment as not for the purpose of business thereby making an addition of Rs. 57,59,731/- inspite of being an NBFC The Honourable Tribunal may be pleased to order accordingly." 3. The assessee is engaged in the business of investment in securities and real estate. ....

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....ame and rather agreed for disallowance of interest expenses to the tune of Rs. 57,59,731/- . The AO disallowed the interest paid of Rs. 57,59,731/- and the same was added to the income of the assessee vide assessment order dated 31.12.2012 passed u/s 143(3) of the 1961 Act. The assessee filed first appeal before learned CIT(A) and contended with respect to the disallowance as was made by the AO and submitted as under:- "C. Ground No. 1: Disallowance of interest of Rs. 57,59,731/- a. The Ld. AO relied on the ratio of income earned vis-a-vis expenditure incurred while making disallowance u/s. 36(1)(iii). The expression "for the purpose of business" is wider in scope than the expression "for the purpose of earning income, pro....

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....with respect to the allowability of interest. The current disallowance is nothing but the change of opinion of the assessing officer which has resulted in disallowance of interest without giving assessee enough opportunity to substantiate his claim. f. The returns filed by assessee for Assessment Years 08-09 and 06-07 were assessed under sec. 143(3) of the Act wherein the claim for deduction of interest towards business expenditure was accepted by the department." 5. The learned CIT(A) dismissed the contention of the assessee vide appellate orders dated 11.12.2015,, by holding as under:- " 4.1 I have carefully considered the facts of the case and the submission made by the Id. AR, It is seen from the details that assess....

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....6. We have heard Ld. DR and perused the material on record . We have observed that assessee is engaged in business of investment in securities and real estate. The assessee has borrowed money from M/s. Home Mehta & Sons P. Ltd. and M/s. Citi Corp Finance India Ltd. The assessee has declared 'income from operations' which consisted dividend income of Rs. 4,75,422/-, interest income of Rs. 7,36,087/- on ICD and income from Trust Property at Rs. 44,717/- . It was observed by authorities below that interest income received by the assessee was from old loans granted to sister concern. It was observed that there were no other activities carried out by the assessee during the year except sale of old shares on which capital gains to the tune of Rs.....