Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (4) TMI 477 - ITAT AHMEDABADAddition on account of interest income not offered to tax - CIT(A) deleted the addition - Held that:- We find that the CIT(A) has followed real income principal as per various decisions holding that no interest accrues when the principal amount of loan itself becomes doubtful. The Revenue neither points out any illegality therein nor does it take us to any evidence rebutting factual finding that the assessee’s loan in question has not become doubtful. We accept assessee’s arguments supporting lower appellate findings under challenge. - Decided against revenue Bad debt disallowance - Held that:- There is no dispute that the assessee is already in money lending business as his claim throughout. There can hardly be any dispute that section 36(vii)(2) provide for this deduction subject to the condition that the concerned assessee takes into account the same in computing of his income of the previous year in which the same is written off or any earlier prevision or that representing the money lent in the ordinary course of business of banking or money lending being carried on by the assessee. There is no such condition in case of money lending/finance business as propagated by the Assessing Officer that only interest income not recoverable and written off is to be allowed as bad debt deductions. We find no reason to interfere with the CIT(A)’s findings under challenge. This ground is decided in assessee’s favour. - Decided against revenue Interest disallowance on account of interest expenditure not incurred for the purpose of the business - Held that:- It emerges from the lower appellate findings that the assessee had already available at his disposal interest free funds to the tune of ₹ 5,29,93,800/-. The CIT(A) finds that the assessee had only utilized interest bearing funds in the investments in question amounting to ₹ 3,30,01,822/- from 27-02-2009 to 31-03-2009. He thereafter reduces the impugned interest disallowances for this time period as ₹ 3,47,197/-. This crucial finding has gone un-rebutted in the course of hearing before us. We reject Revenue’s argument on this score. - Decided against revenue
|