TaxTMI 
TaxTMI 
2023 (4) TMI 378
X X X X Extracts X X X X
X X X X Extracts X X X X
.... has raised following grounds of appeal: 1. On the facts and circumstances of the case, the Ld.CIT appeals erred in upholding the assessment order of Ld.A.O and confirming disallowance of interest of Rs.20,43,936/- It is prayed that the interest be allowed as claimed by the appellant and no addition on account of disallowance of interest of Rs.20,43,936/- be made. 2. The appellant craves leave, to add to alter, amend or delete any of the grounds of appeal on or before the date of hearing. 3. The only issue raised by the assessee is that the learned CIT(A) erred in confirming the disallowance of interest expense for Rs. 20,43,936/- only. 4. The facts in brief are that the assessee in the present case is an individual and deriving ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ich includes interest income of Rs. 2,872.00 and Rs. 54,850/- only from bank and HUF respectively and consultancy income of Rs. 8.75 lakh. The AO further found that the amount was borrowed in earlier years which was claimed to have been utilized for making investment. Therefore, such interest cost on the amount borrowed was not incurred for earning such income under the head other sources. Hence, the AO disallowed the interest cost of Rs. 10,08,368/- only. 6.1 Likewise, the AO found that the assessee claimed interest cost of Rs. 10,31,122/- on account of borrowing from Smt. Bhanumatiben Shah against the business income being interest, remuneration and profit sharing from the firms. However, on perusal of ledger account of the party, it can....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... seen that the appellant has not ; been able to clarify any of the query with regard to its claim of interest expenditure as well as the nexus between the borrowed fund and their use in business or generation of income out of such borrowed fund. The issue has been discussed in detail in the assessment order with regard to the borrowings, investment activities of appellant, generation of income out of borrowed funds etc. At any point of time, including the current proceedings, the appellant had not been able to explain or prove that funds borrowed are used wholly and exclusively for generating income from other sources or income from business or profession. This fact was reaffirmed by the appellant in the present proceedings also by submitti....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... me filed a paper book running from pages 1 to 43 and submitted that the claim of the assessee in the identical facts and circumstances in his own case for the assessment year 2011-12 was accepted by the Revenue in the assessment framed under section 143(3) of the Act. Accordingly, it was contended by the learned AR that the principles of consistency should be maintained, particularly in a situation where there is no change in the facts as well as under the provisions of law. 12. On the other hand, the learned DR vehemently supported the order of the authorities below. 13. I have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, the assessee during the year claimed to have incurred....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pted the identical claim of the assessee in the immediate preceding assessment year, then such claim made in the year under consideration should also be accepted to maintain principle of consistency, particularly in a situation where there was no change in the facts. In holding so, we draw support and guidance from the judgment of Hon'ble Bombay High Court in case of PCIT vs. Quest Investment Advisor (P.) Ltd. reported in 96 taxmann.com 157 where it was held as under: 9. The principle accepted by the Revenue for 10 earlier years and 4 subsequent years to the Assessment Years 2007-08 and 2008-09 was that the entire expenditure is to be allowed against business income and no expenditure is to be allocated to capital gains. Once this princip....