TaxTMI 
TaxTMI 
2019 (11) TMI 984
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.... of income for A.Y. 2013-14 on 31.07.2013 declaring total income of Rs. 15,40,07,274/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dated 29.02.2016 and the total income was determined at Rs. 16,10,20,678/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A) who vide order dated 08.12.2016 (in appeal No.PN/CIT(A)- 2/ACIT Cir-2/PN/597/2015-16) dismissed the appeal of the assessee. Aggrieved by the order of Ld.CIT(A), assessee is now in appeal and has raised the following grounds : "1. The learned CIT(A) has erred on facts and in law in and on facts in not granting a proper opportunity of being heard, thereby violating the principles of natural justi....
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....casting, he concluded that assessee has claimed loss of Rs. 51,03,973/- which is not allowable. He also noted that assessee had shown interest earned of Rs. 56,79,786/- on capital balance of partners against which assessee had claimed interest expenditure of Rs. 37,70,355/- being interest paid on capital balances to the partners having credit balance. AO noticed that the entire interest of Rs. 56,79,786/- is charged on the debit balance of one of the partners namely Shailesh Bhandari. He after noting the interest expenditure which is allowed as deduction, the interest earned on debit balance, the net income from interest earned from the partners worked out to Rs. 19,09,431/- which according to him was assessable as income from business as a....
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....by the appellant. 3.2.1 For claiming any expenditure u/s 37(1) of the IT Act, the onus is on the assessee to prove that the same is wholly & exclusively related to the business of the assessee. This proposition has been laid down by the Hon'ble Supreme Court in the case of CIT vs. Calcutta Agency Ltd. (19 ITR 191). 3.2.2 In the case of L. H. Sugar Factory & Oil Mills (P.) Ltd. Vs. CIT (125 ITR 293) (SC), it has been held that when an assessee claims a deduction the onus is on him to bring all material facts on record to substantiate his claim. 3.3.3 In the written submission filed, Ld. Counsel of the appellant has not been able to justify the claim of various expenses particularly keeping in. view of the fact ....
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....om business and in support of which he pointed to Page 6 of the assessment order. He further pointing to the Balance-Sheet of the firm which is placed at Pages 3 and 5 of the Paper Book submitted that only one of the partners Mr. Shailesh Bhandari's closing balance capital on 31.03.2003 was having debit balance but when the aggregate balance of all the partners is considered, the closing credit balance of the partners capital account as on 31.03.2003 is Rs. 6,11,38,264/-. He pointing to the aforesaid fact from the copy of the Balance-Sheet which is placed at Pages 3 to 5 of the Paper Book. He therefore submitted that AO has wrongly proceeded on the basis of the incorrect assumptions that assessee is not carrying on the business and therefor....