TMI Blog2021 (3) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... onal High Court is to be examined in the instant case. Therefore, we set aside the order of the Ld. CIT(A) on the above issue and restore the matter to the file of the AO to examine the applicability of the ratio laid down in Reliance Utilities Power Ltd.(supra). We direct the assessee to file the relevant documents/evidence before the AO. Appeal is allowed for statistical purposes. - ITA No. 4284/MUM/2019 - - - Dated:- 18-3-2021 - Saktijit Dey , Member ( J ) And N. K. Pradhan , Member ( A ) For the Petitioner : None For the Respondents : Smita Verma , DR ORDER Per N. K. Pradhan , AM This is an appeal filed by the assessee. The relevant assessment year is 2016-17. The appeal is directed against the order of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above sum on the reason that the primary condition for claiming deduction of the interest paid in respect of capital borrowed is that it should be used for the purpose of business, whereas in the present case, the interest bearing fund was utilized for non-business purpose i.e. for investment in mutual fund. 4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). We find that vide order dated 30.04.2019, the Ld. CIT(A) confirmed the above disallowance made by the AO by holding that: 6.1.1 In these grounds appellant is agitated against disallowance of ₹ 3,52,251/- u/s. 36(1)(iii) of the I.T. Act. In the assessment order, the AO concluded that assessee has used borrowed funds from ICICI bank to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rket on interest. Thus, the appellant has paid heavy interest and the same is not for business purpose. 6.1.5. In view of above discussion and by considering the totality of the peculiar facts and circumstances of the case, it is established that the borrowed funds on interest will have to be utilized only for the purposes of business. But in the case in hand, it was not done so. Therefore, it is held that no interference is called for in the decision of assessing officer as the appellant has failed to discharge the onus required under Section 36(1)(iii) of the Act and the Assessing Officer was justified in disallowance and added back to the appellant's income of ₹ 3,52,251/-. Therefore, addition u/s. 36(1)(iii) of the Act is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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