2022 (3) TMI 384

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....as erred in confirming the disallowance of Rs. 19, 06,456/- made by the assessing officer. 3. The facts in brief are that the assessee, an individual, is in the business of trading activities in shares and F&O. In the course of assessment proceedings the assessing officer noticed that the assessee has taken interest bearing loan and also advanced the same on interest. Further, it was also seen that during the year, the assessee has paid interest of Rs. 1, 43, 82,624/- and also received the interest of Rs. 58, 99,173/-. On perusal of the details of interest paid and interest received, it was found that out of total interest paid, the amount of Rs. 1,27,09,707/- was paid to the related parties and the interest was paid @ 15% whereas, the l....

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....on of the Tribunal in the case of M/s Navbharat Potteries P Ltd vs DCIT in ITA No2701/Mum/2011 for the proposition that the lower authorities were not justified in making the disallowance under section 40A (2) (b) without giving any reasons as to how the expenditure incurred was not wholly and exclusively for the business of the assessee. Further, in the case of Subhash Chander & Co 31 SOT 11 Asr) for the proposition that the co-relation of the funds contributed by the partners with the rate of interest on which the money is actually lent by the assessee for making disallowance under section 40A2)(b) is misconceived. 7. The Ld. DR, on the other hand, vehemently relied up on the orders passed by the A.O. and the CIT (A). 8. We find tha....