2025 (2) TMI 1904

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.... business of partnership firm. The return of income for the assessment year 2016-2017 was filed on 16.10.2016 declaring income of Rs. 4,23,830. Against the said return of income, the Assessing Officer ("the AO" hereinafter) completed the assessment vide order dated 27.12.2018 passed u/s.143(3) of the Income-tax Act, 1961 ("the Act" hereinafter) at a total income of Rs. 35,87,300. While doing so, the AO disallowed the claim of set off of interest expenditure of Rs. 32,50,021 paid on drawings from partnership firm M/s. Kailath Estate Investments, of which the assessee is a partner, against the interest on capital received from M/s.Kailath Financiers of Rs. 18,25,467. 3. The brief factual background of the case are that from the previous ye....

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....h Court in the case of Popular Vehicles & Services Ltd. (supra) is misplaced. However, the CIT(A) confirmed the action of the AO. 5. Being aggrieved with the order of the CIT(A), the assessee is in appeal before me in the present appeal. When the matter was called upon, none appeared on behalf of the assessee. Therefore, I proceed to dispose of this appeal on merits after hearing the learned Senior DR. 6. I have heard the learned DR and perused the material available on record. The solitary issue that arises for my consideration is whether the CIT(A) was justified in refusing to allow the claim for allowance of interest expenditure of one firm against the interest on capital contribution of another firm. It is the contention of the as....