TaxTMI 
TaxTMI 
2026 (7) TMI 1076
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....sessment year 2020-21. The following grounds are reproduced below: "1. On the facts and circumstances of the appellant's case and in law the Id. CIT(A) erred in confirming the action of Ld. AO in disallowing the interest expense of Rs. 1,49,52,658/- claimed u/s. 57 without appreciating the fact that the loan against which such interest was paid, was availed for the purpose of earning income chargeable to tax under the head "Other Sources" and hence the same was duly allowable. 2. On the facts and circumstances of the appellant's case and in law the Id. CIT(A) erred in confirming the action of Ld. AO erred in disallowing the forecasting expense of Rs. 2,00,000/- by treating the same as personal expense without appre....
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....,51,52,658 5. It was submitted that Ld. CIT(A) erred in confirming the decision of AO in disallowing the interest expenses of Rs. 1,49,52,658/- claimed under Section 57 of the Act without appreciating the fact that the loan against which such interest was paid was availed for the purpose of earning income chargeable to tax under the head "Income from other sources" and was thus duly allowable. 6. On the contrary Ld. DR appearing on behalf of the Revenue relied on the order passed by the Revenue Authorities. 7. We have heard the counsels for both parties, perused the materials placed on record, the judgments cited before us, and the order passed by the Revenue Authorities. From the records, we noticed that in the return of income, a....
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....r having gone through the entire facts placed before us and also the material placed before us, we found that as per the assessee, she had incurred an interest expenditure on loan taken from Deutsche Bank in December 2016, and which according to the assessee was utilized for making investment and in this regard reliance has been placed upon the copy of financials. 10. We also noticed that the total investment increased from Rs. 285 crores as on March 2016 to 341 crores as on March 2017. We have also perused the copy of financials for AY 2016-17 and 2017-18 which are placed at Paper Book page nos. 79 to 84 and 142 to 147. It was submitted by the Ld. AR that loan was specifically taken to explore investment opportunities in the VCF sector ....
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....) [24-01-2007] • M/s. The Travancore Textiles P. Ltd. v. The Income Tax Officer [/L.T.A.Nos.3193/Chny/2018 & 176/Chny/2019] 13. Now as far as the submission of the Revenue that no nexus between the loan taken and investments was established by the assessee, in this regard, we noticed that once the incremental investments made by the assessee exceed the amount of loan taken, it clearly establishes that the loan funds were utilized for making such investments. Consequently, keeping in view this above reasoning the interest paid on such loan can very well be considered incurred for the purpose of earning income and is thus allowable as deduction under Section 57 of the Act. 14. As regards the observation made by the Revenue ....
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....ng that these were personal in nature and were not incurred for the purpose of assessee's business and thus do not qualify claiming deductions u/s. 57 of the Act. 18. Whereas on the contrary Ld. DR relied upon the orders passed by the Revenue Authorities. 19. We have heard the counsels for both parties, perused the material placed on record, the judgments cited before us, and the order passed by the Revenue Authorities. From the records, we noticed that assessee is engaged in the business of generation of power through windmills situated at various locations and income from the said business was duly and offered to tax. As per the assessee in order to explore the feasibility of setting up new windmill power projects in the state of Ma....