TaxTMI 
TaxTMI 
2026 (8) TMI 1037
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....09.2025, which in turn arises out of an order passed by the Assessing Officer u/s 143(3) of the Act, on 07.12.2018. 2. When the matter was called for hearing, the learned Counsel for the assessee at the outset submitted that the appeal has been filed by the assessee belatedly. The learned Counsel adverted my attention to the affidavit filed in this regard citing reasons for condonation of delay and urged for a benign view and sought condonation of delay of 99 days in filing the appeal before the Tribunal. A perusal of the affidavit gives me an impression of existence of mitigating circumstances to enable me to exercise my discretion in favour of the assessee. Accordingly, the delay is condoned. 3. Since, the issues involved in all the....
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....d on 07.02.2018, 18.08.2018, 15.10.2018, 21.11.2018 & 27.11.2018. 6. In response to notices issued, assessee had filed manual submission on 26.02.2018 and subsequent online submissions on 27.08.2018 & 29.10.2018 about expenses claimed by the assessee under section 57 of the Act. 7. However, assessing officer noticed that on verification of the details available on record, it was noted that during assessment year (A.Y.) 2016-17, the assessee had earned interest income of Rs.25,51,747/- on the loans advanced to other parties. Further, the assessee had also claimed expenses of equal amount, that is Rs. 25,51,747/- against the interest income. The assessee had claimed these expenses u/s 57, that is, for expenditure incurred to earn income....
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....nsideration, assessee's case was selected under CASS for limited scrutiny assessment reason being large deduction claimed u/s 57 of the Act. It was observed by assessing officer that the assessee has claimed large deduction of Rs.25,51,747/-, u/s 57 of the Act against interest income of Rs. 25,51,747/-. Thereafter, various notices were issued by assessing officer time to time and the same is reproduced in para 3-4 of the assessment order. In response to the notices issued, the assessee also submitted online/offline reply along with evidences on 27.08.2018 & 15.10.2018 respectively. However, assessing officer was not completely satisfied with the reply of assessee and he made addition of Rs. 25,51,747/- on account of disallowance of inte....
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.... 5. Interest paid for property (Rs. 11,52,084) Total :- Rs. 36,88,019/- 10. Learned Counsel for the assessee submitted that in the computation of income, assessee claimed deduction of interest expenses to the extent of interest income earned, that is Rs. 25,51,747/-. It is to state that majority of the funds were lent to above parties in the earlier years out of borrowings made as above. The assessee is a partner in the firm M/s Venus Engineering Works. The amount of Rs. 2,59,23,620/- was initially received from the firm on 01.01.2014 and the same was returned by way of borrowings from NBFC and accordingly, the amount ultimately stood financed out of funds borrowed from NBFC. During the course of assessment proceed....
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....parties. As regards nexus between funds obtained from Banks/NBFCs and granted to private parties, as stated above, Assessing officer himself observed in various paras of assessment order that "these loans have been granted after obtaining the funds from various Banks/NBFCs like IIFL, HDB and Chola Mandalam". Thus, assessing officer himself is of the opinion that loan/advances on which interest is earned by assessee were given out of loan received from Banks/NBFCs etc, on which interest have been paid. Thus, nexus between borrowing of interest bearing funds and its utilization for giving loans on which interest is earned stands established. Hence, there is absolutely no justification in making disallowance of interest expense. I also note th....