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2011 (9) TMI 538 - AT - Income TaxReopening of assessment u/s 147 - reason to believe - Held That:- Where Assessee made a wrong claim of payment housing loan interest paid to ICICI Bank as allowable u/s 57(iii) of the Act. Accordingly, we hold that the assessing officer is justified in issuing the notice for reopening of the assessment. Housing loan from ICICI Bank - Utilized by giving loan to M/s Laxi Ganapathi Paper Mills - Deduction of Interest claimed - Housing loan deduction could have been claimed under Sec 24 assessee claimed under Sec 57 - Held That:- Assessee not entitled for deduction u/s 57(iii) of the Act. Interest on borrowing was not allowable as deduction from interest income derived from loan given to company as interest paid had no nexus with interest earned in as much as expenditure by way of interest could not be said to have been expended wholly and exclusively for earning income by way of interest from loan.Reliance placed on Karnataka Forest Plantations Corporation Ltd., Vs. CIT (1985 - TMI - 27135 - KARNATAKA High Court) Assessment on a issue not mentioned in notice issued under 148 - Gifts from NRI relatives as income of assessee - Held That:- In view of the explanation 3 to section proviso to section 147, the assessment of gift as income of the assessee under section 56(1) (V) is justified.
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