TaxTMI 
TaxTMI 
2023 (7) TMI 800
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....confirming disallowances of interest without properly appreciating the submission of the appellant. 3. Crave leave to add, amend, alter, vary, or withdraw any or all the grounds of appeal before or at the time of hearing of the appeal." 2. Facts in brief are that assessee is an individual and engaged in trading and manufacturing of textile fabrics, filed his return of income on 11.10.2013 declaring income of Rs. 4,68,140/- for the assessment year 2013-14. The assessment was completed under section 143(3) on 23.03.2016 at Rs. 5,17,750/-. Subsequently, the Assessing Officer on perusal of record found that assessee has shown interest received of Rs. 20,773/- under the head "income from other sources" against which, the amount of Rs. 6,49,951/- was claimed as deduction on account of interest paid to other parties. The assessee has already claimed interest of Rs. 15.42 lakhs in profit and loss account for loan borrowed for its business. Thus, interest amount of Rs. 6,49,951/- claimed for "income from other sources" was not justified, hence, deduction was not justified. On the basis of such observation, the Assessing Officer was of the view that income of assessee to the exte....
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....15.42 lakh for loans borrowed for business purposes as per Section 57(iii) only those expenditures are allowable which was laid out wholly and exclusively for the purpose of earning income under the head "income from other sources" as per mandate of Section 57(iii) as the assessee has already claimed in profit and loss account of interest of Rs. 15.42 lakh. Thus, same is not allowable expenses. The Assessing Officer disallowed expenditure of Rs. 6,49,951/- in the assessment order dated 30.11.2018 under section 143(3) r.w.s. 147 of the Act. 4. Aggrieved by the re-assessment as well as addition in the assessment order, the assessee filed appeal before Ld. CIT(A). The case of assessee migrated before NFAC/Ld. CIT(A). Before NFAC/Ld. CIT(A) the assessee challenged the validity of re-opening under section 147 r.w.s. 148 of the Act and addition of interest expenses. Both the grounds raised before NFAC/Ld. CIT(A) the assessee filed his detailed written submission. The submission of assessee recorded in para-4 of the order of NFAC/Ld. CIT(A). On the validity of re-opening, assessee submitted that re-opening was not justified as the assessment in case of assessee completed under section ....
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....nce on the decision of Tribunal is misplaced. The interest expenses are not claimed as business expense under section 36(1)(iii) in the return of income and no revised return was filed within the prescribed time, if the assessees claimed expenses for the purpose of business then no such return was filed. Thus, confirmed the action of AO. Further aggrieved assessee has filed present appeal before NFAC/Ld. CIT(A). 6. I have heard the submission of Ld. Authorized Representative (Ld. AR) for the assessee and Ld. Senior Departmental Representative (Ld. Sr-DR) for the Revenue and have gone through the order of lower authorities carefully. Ground No.1 relates to validity of re-opening. The Ld. AR for the assessee submits that in the business of trading and manufacturing textile fabric, the assessee claimed interest expense of Rs. 6,49,951/- under section 57(iii) and interest payment made against the unsecured loan. During original assessment, Assessing Officer called for explanation of admissibility of interest expenses claimed by assessee under section 57(iii) and assessee furnished detailed submission regarding allowability of said expenses vide order-sheet dated 20.03.2016. The Asse....
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.... which he must record to believe that reason of omission or failure on the part of assessee to make a true and fully disclosed or material fact for re-assessment during the concluded assessment proceedings any part of his income profit or gain chargeable to tax as escaped assessment. He may start re-assessment proceeding either from fresh facts came to light or disclosed with regard to the fact disclosed came to his possession. The assessee wrongly claimed the deduction under section 57(iii) to the extent of Rs. 6,49,951/-, which was not allowable expenditure. The re-opening was made within four years from the end of relevant assessment year and only requirement to initiate the re-assessment proceeding under section 147 is reasons to believe that assessee still claiming deduction under section 57(iii) though at the same time the assessee is claiming all borrowed fund against which interest expenses were claimed was infused for the purpose of business and not for the purpose of earning "income from other sources". On the merit of addition, Ld. Sr-DR for the Revenue submits that interest expense of Rs. 6,49,951/- was not expanded wholly and exclusively for the purpose of earning inco....