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2019 (6) TMI 743 - AT - Income TaxDeemed dividend u/s 2(22)(e) - receipt of loan from company holding more than 10% shares in the said company - HELD THAT:- As gone through the ledger extract of loan given to MIPL. A perusal of the said account reveals that the assessee had given loan to MIPL and the opening balance as on 1.4.2010 was ₹ 40.55 crores. Thereafter, during the year, the assessee has further given loans of ₹ 2 crores on various dates totalling to ₹ 6.33 crores. The said company MIPL has refunded the loans to the extent of ₹ 3.68 crores and closing debit balance was ₹ 2.61 crores. The said ledger account is self-explanatory and clearly shows that the loan was given by the assessee to MIPL and not vice versa. Since this ledger account was before the AO who had examined the same before making the addition, we do not find it necessary to restore this issue to the file of the AO for verification of the same facts. Allowability of interest on loan u/s 57 - loss under the head ‘Income from other sources’ - nexus between the income earned u/s 56 and expenses claimed u/s 57 - HELD THAT:- There is no dispute that the assessee has raised secured loans from HDFC Ltd, BHW Home Finance and Religare Finvest Ltd. It is also not in dispute that the assessee has transferred these borrowings as loan to MIPL. It is also not in dispute that the loans have been raised in F.Ys 2007-08, 2008-09 and 2009-10. The assessee has charged interest from MIPL @ 15% whereas the assessee is paying interest on borrowed funds ranging from 12.94% to 18.5%. We have also examined the bank statement of Canara bank exhibited at pages 28 to 31 of the paper. A perusal of the same shows that as soon as the assessee received the funds from HDFC Ltd, BHW Home Finance and Religare Finvest Ltd., the same were transferred to MIPL, thus clearly establishing the direct link/nexus between the borrowings and lending. No disallowance on this count. We, accordingly, direct the Assessing Officer to delete the entire disallowance Deduction u/s 80C OR u/s 80G - HELD THAT:- As perused the computation of taxable income we find force in the contention of the ld. AR. In the inner column, deduction u/s 80C has been shown at ₹ 25,08,938/- and in the outer column, only eligible deduction of ₹ 1 lakh has been shown. Though there is a mention of deduction u/s 80G, but nothing has been claimed under this section. It appears that the AO has wrongly taken the claim of deduction u/s 80C as claim of deduction u/s 80G. Facts are in favour of the assessee and, therefore, no interference is called for.
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