TaxTMI 
TaxTMI 
2022 (7) TMI 842
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....ome Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2016-2017. 2. The 1st issue raised by the assessee is that the learned CIT-A erred in confirming the disallowance of interest expenses of Rs. 18,00,448/- claimed against the interest income of Rs.19,51,695 only. 3. The facts in brief are that the assessee in the present case is an individual and claimed to have borrowed money from the firm in which he is a partner. On such borrowing the assessee has incurred interest cost of Rs. 18,20,448.00 only. The money was borrowed by the assessee for the purpose of purchasing the residential property. At the same time the assessee has also made deposits in a company known as Lubgraf Synoils Pvt. Ltd. on wh....
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....ffered the impugned interest income received from the assessee to tax in its income tax return. Therefore, it cannot be said that details of the interest expenses were not furnished during the assessment proceedings. 6.1 The assessee further submitted that the amount which was deposited with the company on which he was earning the interest income, was not repaid by the company at the relevant point of time on account of lack of liquidity in its hands. Thus, in such a scenario, the assessee had to borrow the money from the partnership firm and incurred the interest expenses. In other words, had the assessee being able to get the money back which was deposited with the company, the same would have been utilized for the purpose of acquiring....
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....e contention of the revenue on the reasoning that the assessee before the learned CIT-A has claimed to have furnished the necessary details to establish the genuineness of the interest expenses and this contention of the assessee was not controverted by the learned CIT-A. Accordingly we can safely infer that all the details relating to the interest expenses were available before the AO during the assessment proceedings. Besides the above we have referred the paper book filed by the learned AR running into pages 1 to 82 and note that the assessee has filed the capital account maintained in the partnership firm which is placed on pages 43 to 45 of the paper book. The learned DR at the time of hearing has also not brought anything on record co....
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....ggarwal Vs. DCIT reported in 47 taxmann.com 88 has observed as under: "On these facts, in order to protect the interest earnings from fixed deposits and to meet her financial needs, when an assessee raises a loan against the fixed deposits, so as to keep the source of earning intact, the expenditure so incurred in wholly and exclusively to earn the fixed deposit interest income. The authorities below were apparently swayed by the fact that the borrowings were triggered by assessee's financial needs for personal purposes and, by that logic, the borrowing cannot be said to be wholly and exclusively for the purposes of earning interest income, but what this approach overlooks is whether the expenditure is incurred for directly con....