TaxTMI 
TaxTMI 
2022 (5) TMI 297
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....ruction contracts and M/s. Sohal sand supplier for trading in building materials. In addition, the assessee is partner in several firms. Some interest income was credited and interest expenditure was debited in the Profit & loss account of M/s. Sohal Construction. On verification, the Assessing Officer (AO) observed that the assessee had withdrawn certain amounts through journal entries from the firms in which deduction under section 80IB of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') was claimed, which were invested, again through journal entries, to the firms in which no deduction u/s 80IB was available. The assessee had made transfers by withdrawal of Rs.17,04,15,052 from a firm M/s. Eisha Properties (eligible for sec....
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....for hearing on earlier occasions as well, when the ld. AR was directed to file copy of accounts of such firms in the books of the assessee having transfer entries of withdrawals and deposit entries. Such details have been placed by the ld. AR in paper book from page 1 to 46. Account of Eisha Arihant Build Con LLP is available at page 6 of paper book, which shows two journal debit entries totalling Rs.37.00 lakh with credit to Eisha Properties account. This shows that the assessee in his books (Proprietorship concern Sohal Construction) debited Eisha Arihant Build Con LLP with sum of Rs.37 lakhs and credited Eisha Properties with equal amount. Page 7 is the account of Eisha Asset Developers in the books of the assessee. There are several deb....
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....ax on interest in the hands of Eisha Properties. It is not even a case of mixed pool of funds in the hands of the assessee. Rather it is a straight transfer from one firm's account to another thereby ingraining direct nexus between the two. Obviously, such an amount of interest paid for extra commercial considerations cannot be allowed as deduction. 4. The ld. AR, without prejudice to main argument of the deletion of entire addition, submitted that the calculation of excess interest of Rs.78.56 lakhs made by the AO was incorrect. On an earlier occasion, a report was called for from the concerned AO on the correct amount of excess interest. Such report dated 23.02.2022 has been placed on record, in which the AO has tabulated the amount of i....