AI Drafter 
TaxTMI 
TaxTMI 
2020 (4) TMI 482
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....ssing Officer on account of disallowance of interest expenses, for the reason that the interest bearing funds were diverted for purchase of a land. 3. Briefly stated, the facts of the case are that the assessee is a firm. For the assessment year 2009-10, the return of income was filed on 24.09.2009, declaring income of Rs. 15,62,579/-. The scrutiny assessment u/s. 143(3) of the I.T. Act was completed, determining total income of Rs. 31,21,840/-, disallowing a sum of Rs. 15,59,264/- and adding back the same to the total income. One of the additions made in the scrutiny assessment was with regard to proportionate disallowance of interest expenses claimed by the assessee. The Assessing Officer noticed that the assessee had purchased land fo....
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....hat being the assessee firm's asset, the same will be utilised for its business and the interest expenses incurred cannot be disallowed. The CIT(A) however rejected the contentions raised by the assessee. The CIT(A) noticed that for AY 2008-09, an identical issue was considered by him in assessee's own case. The CIT(A) after reproducing his finding for AY 2008-09 in assessee's own case, rejected the appeal for AY 2009-10. The relevant finding of the CIT(A) reads as follows: "5.1 The issue has been dealt by the undersigned in AY 2008-09 also where an identical amount of Rs. 12 lakhs was disallowed by the Assessing Officer on the same ground. During the assessment proceedings and also in the course of appellate proceedings for AY 200....
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....taken by the Appellant that it is business asset and shall be used for purchase of business asset appears to be only an afterthought to avoid tax. Therefore, in the circumstances, I uphold the addition made by the Assessing Officer for Rs. 12,00,000/- and the ground is dismissed." 5.2 For the same reasons as stated in the order for AY 2008-09, I uphold the addition made by the Assessing Officer for Rs. 12 lakhs and ground No. 1 is therefore, dismissed" 5. Aggrieved by the order of the CIT(A), the assessee has filed this appeal before the Tribunal, raising the following grounds: 1. The Learned CIT(Appeals) erred in upholding the addition of Rs. 12,00,000/- made by the AO. The addition was made on the ground that the sum ....
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....ess. 7. There is the expression "for the purpose of business" in section 36(1)(iii) and also in section 37(1). A similar expression with different wording also occurs in section 57(iii) which reads as "for the purpose of making or earning income". The expression occurring in section 36(1)(iii) is wider in scope than the expression occurring in section 57(iii). This phrase, as held by many legal pronouncements, is the most important yardstick for the allowabiity of deduction under section 36(1)(iii) of Income Tax Act, 1961. 8. The Hon'ble Supreme Court in the case of S.A. Builders Ltd. Vs. CIT(A), Chandigarh reported in 288 ITR 1 has used the phrase "commercial expediency". By using this phrase, the Hon'ble Supreme Court ha....
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.... However, the Ld. AR has filed written submission stating that their appeal for assessment year 2008-09 was heard on 28/01/2020. It was submitted that the issue agitated in both the years are identical and therefore, the Ld. AR requested that the decision for 2008-09 may be applied for assessment year 2009-10 also. 6.1 The Ld. DR submitted that the issue in question is covered in favour of revenue by the order of the Tribunal in assessee's own case for AY 2008-09 (ITA No.575/Coch/2019 dated 03-02-2020). 7. I have heard the Ld. DR and perused the material on record. For the assessment year 2008-09, an identical issue was considered by the Tribunal in assessee's own case (supra) . The relevant findings of the Tribunal reads as follows: ....