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2022 (7) TMI 842 - AT - Income TaxDisallowance of interest expenses - 1st allegation of the Revenue was that the necessary documents were not furnished by the assessee with respect to the interest expenses incurred - HELD THAT:- We disagree with the contention of the revenue on the reasoning that the assessee before the CIT-A has claimed to have furnished the necessary details to establish the genuineness of the interest expenses and this contention of the assessee was not controverted by the learned CIT-A. Accordingly we can safely infer that all the details relating to the interest expenses were available before the AO during the assessment proceedings. Besides the above we have referred the paper book filed by the learned AR running and note that the assessee has filed the capital account maintained in the partnership firm which is placed - DR at the time of hearing has also not brought anything on record contrary to the arguments advanced by assessee. Thus, we hold that the expense shown by the assessee in the form of interest to the partnership firm is genuine. Whether the interest expense can be adjusted against the interest income? - As relying on Raj Kumar Aggarwal [2014 (7) TMI 867 - ITAT AGRA] we hold that the interest expense was incurred by the assessee on the money borrowed from the partnership firm as he failed to recover the deposits from the company. Thus, in our considered view the interest expenses are directly connected to the interest income which the assessee has received on the deposits from the company and thus eligible for deduction. In view of the above the ground of appeal of the assessee is allowed.
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