Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (10) TMI 391 - AT - Income TaxDisallowance of interest expenditure on unsecured loan borrowed and invested in the capital of two proprietary concerns as not allowable business expenditure - HELD THAT:- From the perusal of the Balance Sheet itself it is noted that the borrowed funds which is to the tune of ₹ 92 lakhs which fund was thus utilized in the proprietorship concern and, therefore, the CIT(A)'s contention that utilisation of loan can only be proven through a cash flow statement cannot be countenanced in the facts of the case as discussed. CIT(A) erred in not appreciating the claim of the assessee in the right perspective and, therefore, since the amount which the assessee has borrowed has been utilized and invested by the assessee in the two concerns, the interest is an allowable expenditure. Moreover, it has also been brought to our notice that in the subsequent two assessment years i.e. for AY 2013-14 and 2014-15 the interest paid on the very same loan borrowed by the assessee which is carried forwarded from earlier years was allowed as business expenditure in the hands of the assessee. Thus, it is seen that AO has accepted the allowability of the said interest expenditure in subsequent years and, therefore, a consistent stand needs to have been taken and taking into consideration the facts noted supra, we allow the claim of the assessee. - Decided in favour of assessee.
|