2022 (3) TMI 827

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.... section 57 of the Act. 3. Assessee is a Chartered Accountant by profession. During the course of scrutiny assessment proceedings the AO noticed that the assessee has borrowed Rs. 4,50,91,200/- from M/s. Y. K. Gupta Co. in which he is a partner and has paid interest of Rs. 54,06,032/-. The AO further noticed that the assessee has extended a loan of Rs. 6,37,49,869/- to M/s. Smartest Corporate Services Pvt. Ltd. from which he had received interest of Rs. 3976274/- which was claimed deductions u/s.57 of the Act. 4. The AO was of the opinion that on borrowed funds the assessee has paid interest of Rs. 54,06,032/- whereas the assessee has received interest much less from the loan given by him. The assessee was asked to explain as to why t....

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.... Rs. 54,06,032/- as interest on borrowed funds. Therefore, the deduction on account Sec. 57(iii) from interest income of Rs. 39,76,274/- from borrowed funds should have been restricted to Rs. 39,76,274/- only and not Rs. 54,06,032/- as claimed by the assessee from entire income from Other Sources. As pointed out by the AO, the correct way for the assessee to claim deduction u/s 57(iii) would have been, as follows: Interest Income received   Rupees Saving Bank A/C (As per Annexure)   27,076/- Huda Plot Application   3,901/- Sunworld Developers Pvt. Ltd.   7,92,138/- Sunworld City Pvt. Ltd.   2,22,898/- Sunworld Resi. Pvt. Ltd   83,193/- Sunworld Infrastruc....