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2021 (9) TMI 391 - AT - Income TaxDisallowance of interest paid on loan - interest expenditure nexus to the interest income earned - HELD THAT:- Major amount of loans were taken in the preceding years and amount advanced to M/s Sneha Medicare Pvt. Ltd. The assessee is consistently claiming interest expenditure against the interest income. There is a positive interest income at the end of the year. Nexus of amount received during the year to the amount advanced to Sneha Medicare Pvt. Ltd. is also appearing from record. The details filed before us including the ledger account of Sneha Medicare Pvt. Ltd. complete details of unsecured loans taken by the assessee including the details of opening balance, addition, repayment, interest and rate of interest and also the date-wise details of interest received during the year and also considering the fact that no abnormal rate of interest has been paid on the loans taken during the year and thus are inclined to hold that the alleged claim of interest expenditure has nexus to the interest income earned from Sneha Medicare Pvt. Ltd. and thus deserves to be allowed u/s 57(iii). Unexplained cash credit u/s 68 - Disallowing unsecured loan - HELD THAT:- The confirmation of accounts has also been filed which contains the complete address and PAN No. of the cash creditor. Non-filing of return in a particular year cannot be held to be a sole basis to treat the cash credit as unexplained. All these documents filed by the assessee stand un-rebutted by the Departmental Representative as no contrary material is placed before us. Also no independent inquiry has been conducted by both the lower authorities to controvert the submissions made by the assessee at the time of assessment proceedings and appellate proceedings. Considering the documents filed before us including copy of ledger account, bank statements, confirmation of account, copy of the PAN and Address, are of the considered view that the assessee has been successful to prove the identity and credit worthiness of Vanleela P. Mehta and genuineness of the alleged transaction. We thus delete the addition made u/s 68. Disallowance of business expenditure claimed to have been incurred wholly and exclusively for the purpose of business - HELD THAT:- As alleged disallowance made by the AO has not been made on the basis of any irregularity found in the documents and books maintained. The expenditure claimed by the assessee are normal business expenditure. Though they have been incurred in cash but they are incidental for earning commission income. The total expenditures of ₹ 1,08,105/- has been claimed against the commission income of ₹ 1,65,000/- leaving behind the positive income of ₹ 68,895/- - The alleged disallowance prima facie seems to be an ad-hoc disallowance which in our considered view was not called for. - Decided in favour of assessee.
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