2019 (10) TMI 467

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....ssly erred in confirming addition of Rs. 25,05,190/- out of interest expenses claimed u/s 57 of the Act, when he ought to have deleted it in entirety. 2. Without prejudice to the above, on facts as well as in the circumstances of the case, the Ld. CIT(A) has grossly erred in not appreciating the merits of the case with reference to factual submission of the appellant and has further erred in sustaining the addition, simply following his own order for the preceding assessment year, when the case of the appellant is much more stronger on merits in the year under consideration. The order being perverse to the above extent, and not based on a proper appreciation of facts, the same deserves to be reversed. 2. At the outset, the respe....

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....ng Officer has accepted the loss at Rs. 20,25,241/-. Apart from these three assessment years and computation of income, assessee has placed on record, the copies of the assessment orders starting form Assessment Year 2001-02 up to 2012-13. We have perused Assessment Year 2004-05 and 2005-06 also. We find that as far as persons namely; Nanibhai V. Patel HUF Mehsana Urban Bank Ltd. Mehsana Urban Bank Ltd Co-op Bank of Mehsana Maniben Manilal Patel Kailashben Manibhai Patel Maulik Manibhai Patel are concerned, they are the persons who have advanced the money to the assessee and to whom interest was paid. To these very persons, interests have also been paid in the present year. Thus, the loan was taken from these persons long back and ....

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....ny loss in any activity which results "income from other sources". All the details were before the ld. Commissioner of Income Tax (Appeals) but instead of pin pointing any concrete diversion of interest bearing funds; ld. Commissioner of Income Tax (Appeals) only assumed that some funds might have been used by the assessee for some other purposes. The department has been consistently accepting the claim in earlier years and in subsequent years. It appears that in the beginning, assessee has more income under the head "income from other sources" as than the interest expenditure, but in Assessment Year 2006-07, 2007-08 and 2009-10, the interest expenditure was more than income, in spite of that loss under the head "income from other ....