TaxTMI 
TaxTMI 
2025 (8) TMI 1425
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....Act') for the Assessment Year 2018-19. 2. The brief facts of the case are that the return of income for A.Y. 2018-19 was filed by the assessee on 30.10.2018 declaring total income of Rs. 67,67,450/-. The case was selected for complete scrutiny under CASS. The assessment was completed under Section 143(3) r.w.s. 144B of the Act on 27.04.2021 at total income of Rs. 1,07,43,621/-. In the course of assessment, the AO had made addition of Rs. 39,76,171/- in respect of wrong deduction of interest claimed by the assessee u/s.57 of the Act. Subsequently, the case record was called for and examined by the Ld. PCIT who found that the assessee had claimed deduction of interest expenses of Rs. 68,95,778/- against the income/receipts of the assessee ....
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....nterest expense of Rs 68,95,778/- against taxable income received from partnership firm. It is submitted that the complete justification along with documentary evidences were duly filled for total interest expense claimed Rs. 1,58,76,232/- and only after careful examination and application of mind, the Ld. AO has disallowed interest expenditures of Rs 39,76,171/- and allowed remaining expenditures including Rs 68,95,778/-, It is therefore submitted that is no question of any lack of inquiry or verification on the part of assessing officer and further under assessment of income. In view of this, order passed u/s 263 being totally illegal and unjustifiable be set aside and Original Assessment Order passed u/s 143(3) r.w.s 144B of the Act be r....
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....n this regard, the Ld. AR also placed reliance on the decision of Jurisdictional High Court in the case of CIT v. Kamal Galani (2018) 95 taxmnn.com 261 (Guj.) (HC) and on the decision of Co-ordinate Bench of this Tribunal in ITA No.328/Ahd/2023 dated 05.07.2024. 5. Per contra the, Shri Prathvi Raj Meena, ld. CIT-DR submitted that assessee was not carrying on any independent business. The income from business and profit as disclosed by the assessee in the Income-tax return was in the form of profit from partnership firm, which was claimed exempt u/s.10(2A) of the Act. Further, the assessee had also claimed the deduction for interest against the remuneration received from partnership firm Ratna Developers, which was patently not allowable ....
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....ved from three partnership firms to the extent of Rs. 57,05,778/- was adjusted with the interest expense. In order to claim this deduction, the assessee was required to substantiate that the loans on which the interest of Rs. 57,05,778/- was paid were laid out wholly and exclusively for earning of interest income from three partnership firms. The assessee had also shown remuneration of Rs. 11,90,000/- received from Ratna Developers, which was adjusted with interest expense of equivalent amount. The adjustment of interest expense with the remuneration was apparently not allowable as deduction, as the interest expense was not laid out for earning of remuneration of the assessee as working partner of Ratna Developers. It is found that this asp....
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....tion 1288616 4 Samvatt Residency 280194 Total 5705778 You are requested to justify your claim of deduction of Rs. 68,95,778/-. Please file the copy of your capital account in the books of above tabulated firms." 8. In reply, the assessee had made the following submission: "3. Capital account of partnership firms: We have already attached working for deductions claimed of Rs. 6895778/- in the above point no. 1 vide working "Interest expense claimed" We are attaching herewith copy of "Capital account of partnership firms" for interest income and salary income earned for below mentioned firms- (i) Samvatt Developers (ii) Aadi Infra Developers (iii) Sa....