Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (4) TMI 780 - ITAT MUMBAIEntitlement for deduction of interest expenditure - deduction of the interest expenditure in respect of the amounts advanced by to 5 parties - HELD THAT:- As the amount that was recoverable by the assessee during the year under consideration from the party Aristo Shelters Pvt. Ltd.had no nexus with the interest bearing funds which were borrowed by the assessee from the banks, therefore, on the said count itself no disallowance of any interest expenditure pertaining to the said amount was called for under Sec. 36(1)(iii). Appeal of the assessee is allowed for statistical purposes. As the assessee had advanced the loan to M/s Aristo Shelters Pvt. Ltd. on interest, therefore, no disallowance of any part of the interest expenditure in respect of the said interest bearing advance could have been validly made in the hands of the assessee. As such, we direct the A.O to vacate the disallowance of the interest expenditure. Additional ground before the appellate authorities - Amounts advanced by the assessee to the remaining 4 parties - CIT(A) being of the view that the assessee had in its return of income as well as in the course of the the assessment proceedings claimed deduction of the interest expenditure under Sec.57 (iii) therefore, it was disentitled from raising the claim for deduction of the aforesaid amount under Sec. 36(1)(iii) - HELD THAT:- We are unable to persuade ourselves to subscribe to the same - assessee had raised a claim for deduction under Sec. 36(1)(iii), based on the facts which were already available on record, therefore, the CIT(A) was well within his jurisdiction to have adjudicated upon the same. CIT(A) had summarily scrapped the aforesaid claim of the assessee, for the reason, that the same was raised for the very first time before him. See Pruthvi Brokers and Shareholders Pvt. ltd [2012 (7) TMI 158 - BOMBAY HIGH COURT]observed that assesses is entitled to raise an additional ground before the appellate authorities not merely in terms of legal submissions, but also additional claims to wit claims which were not made in the return of income filed by it. Accordingly, we are of the considered view that the CIT(A) ought to have considered the assesse‟s claim for deduction of the interest expenditure under Sec.36(1)(iii) of the Act, specifically, when the same was being raised on the basis of the facts which were already available on record - No declining on the part of the CIT(A) to consider the assesse‟s claim for deduction under Sec. 36(1)(iii). Entitlement for deduction of the interest expenditure under Sec. 36(1)(iii) - CIT(A) had summarily rejected the assesse‟s entitlement for claim of deduction under Sec.36(1)(iii), therefore, there was no occasion for him to adjudicate upon the maintainability of such claim on merits. Accordingly, we are of the considered view that in all fairness the matter requires to be restored to the CIT(A), with a direction to verify the assesses entitlement for claim of deduction under Sec. 36(1)(iii) for remaining 4 parties. Appeal of the assessee is allowed for statistical purposes.
|