TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 126
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....sessee is an individual and is engaged in the business of trading of agro products. He filed his return of income on 26th September, 2015 declaring the total income at Rs. 16,85,900/-. During the course of assessment proceedings, the AO noticed from the various details filed by the assessee that the assessee has debited an amount of Rs. 27,11,471/- towards payment of interest for the impugned assessment year. He noted that this interest is paid on secured loan of Rs. 2,26,52,053/- whereas he has also given interest-free advance of Rs. 1,12,03,500/-. He, therefore, asked the assessee as to why proportionate interest should not be disallowed u/s 36(1)(iii) and u/s 37(1) of the Act to the extent of Rs. 1,12,03,500/- not utilized for business p....
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....facts and in law in confirming action of the AO rejecting the contention of the assessee that the advances having been made out of the owned funds of the assessee, no disallowance u/s 36(1)(ii) can be made. 4. On the facts and circumstances of the case, the learned CIT(A) has grossly erred both on facts and in law in rejecting the contention of the assessee that the interest claimed by the assessee having direct nexus with the business expediency of the assessee, no disallowance under section 36(1)(iii) can be made. 5. The appellant craves leave to add, amend or alter any of the grounds of appeal." 6. The ld. Counsel strongly challenged the order of the CIT(A) in sustaining the disallowance of Rs. 27,11,471/- made by the AO u/s 36(1....
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.... genuineness and reasonableness of an expenditure incurred by the assessee. For the above proposition, he relied on the decision of the Hon'ble Delhi High Court in the case of CIT vs. Dalmia Cement Pvt. Ltd. reported in 254 ITR 377, the decision of Hon'ble Calcutta High Court in the case of Ravi Marketing Pvt. Ltd. vs. CIT, reported in 280 ITR 519, the decision of the Hon'ble Supreme Court in the case of SA Builders Ltd. vs. CIT, 288 ITR 01. Further, the decision relied on by the ld.CIT(A) in the case of Abhishek Industries Ltd. (supra) has already been reversed by the Hon'ble Supreme Court. He accordingly submitted that the order of the CIT(A) be set aside and the grounds raised by the assessee should be allowed. 7. The ld. DR, on the oth....
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....loans to different persons." 8. Referring to the order of the CIT(A), the ld. DR drew the attention of the Bench to the finding of the CIT(A) and submitted that the ld.CIT(A) has given valid reasons while upholding the order of the AO. He accordingly submitted that the ground raised by the assessee should be dismissed. 9. I have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. I have also considered the various decisions cited before me. I find, the AO, in the instant case, made addition of Rs. 27,11,471/- by invoking the provisions of section 36(1)(iii) on the ground that the assessee has paid interest of Rs. 27,11,471/- on secured loan....
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....nk account at Rs. 3,867/- all totaling to Rs. 9,19,493/- and accordingly, along with business income has declared the total income of Rs. 16,85,897/- which is the figure taken by the AO in the body of the assessment order as the returned income. Thus, the AO has taxed the interest income on 8% interest on investment of Rs. 1 crore government securities and Rs. 1,15,626/- as interest on short-term fixed deposits. The own capital of the assessee company stands at Rs. 75,58,000/- which is not disputed by the lower authorities as it was the plea of the assessee from the very beginning. From the various details furnished by the assessee, we find out of the total amount of Rs. 1,12,03,500/-, only an amount of Rs. 17,40,000/- given to Nazuk Jindal....