2024 (10) TMI 584

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....ppeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the disallowance of Rs..40,57,125/- ignoring direct nexus between the loan borrowed and loan given in the facts and circumstances of the case. 3. Brief facts as emanating from record are that the assessee is an individual and Director of Thangamayil Jewellery Limited. According to the Assessing Officer, the assessee has shown interest from saving bank account and interest from Thangamayil Jewellery Limited under the head income from "other sources" and claimed the same as deduction under section 57 of the Income Tax Act, 1961 ["Act" in short]. It was explained that the assessee availed loan from LIC, ICICI Bank Ltd. an....

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....of Mumbai Bench of the Tribunal in the case of ACIT v. Nishith Desai reported in [2017] 56 ITR (Trib) 560. He referred to para 8 of the said order and submits that the Tribunal allowed interest expenditure under section 57 of the Act, wherein, the loan borrowed in the name of the housing loan, but, it has been utilised for investing in debentures. He argued that in the present case also, the assessee availed loan from banks, etc. and the same was transferred to M/s. Thangamayil Jewellery Limited and interest earned thereon, which clearly shows nexus in earning interest income from M/s. Thangamayil Jewellery Limited out of borrowed loans. He argued that the order of the Mumbai Benches of the Tribunal clearly applicable to the facts of the ca....

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....h clearly shows the assessee earned interest income from M/s. Thangamayil Jewellery Ltd. by transferring loan amounts availed from the above said three banks. The copies of their sanction letters were before the Assessing Officer and the Assessing Officer did not accept the same as the loan availed from the above three banks were for different purposes. 7. On perusal of the assessment order in the case of Balarama Govinda Das, who is stated to be other partner of the assessee, we note that deduction under section 57 of the Act was allowed basing on same facts and circumstances, which are reflecting in para 5 and 6 of the said order. The ld. DR stated that the issue may be remanded to the file of the Assessing Officer for re-examination in ....