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2016 (12) TMI 1831 - AT - Income TaxDisallowance of interest paid on loans - Assessee claimed interest on accrual basis - Right to claim deduction on the basis of earlier assessment - Whether said interest was accrued on the loans borrowed in earlier years and there is no actual payment of this interest to the parties? - as per AO assessee has not shown the parties for which the loans were borrowed and the interest was disallowed - HELD THAT:- Assessee has borrowed the amount for the purpose of investment in other firms as capital of the assessee - when the assessee borrowed funds for the purpose of investment in other partner firms, it cannot be allowed as deduction as income earned from firm is not feasible while computing the income of the assessee. This view is fortified by the judgment of Popular Vehicles and Services Ltd.[2009 (10) TMI 574 - KERALA HIGH COURT] - in earlier assessment years, there was no assessment u/s.143(3) and the return was accepted only u/s.143(1) of the Act without any scrutiny. It cannot be said that the right is vested with the assessee to claim such deduction on the basis of earlier assessment. Accordingly, the grounds raised by the assessee are dismissed.
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