Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (10) TMI 716 - AT - Income TaxReopening of assessment - non disposal of the objections before passing the reassessment order - HELD THAT:- There are divergent views of different High Courts on the issue whether non disposal of the objections before passing the reassessment order would render the reassessment order invalid or it is only a procedural irregularity. Since the decision of the Hon’ble Jurisdictional High Court is binding on the Tribunal, therefore, this Tribunal in the said case of Shri Manoj Dubey SH. GOVIND SHARAN GUPTA [2020 (5) TMI 574 - ITAT JAIPUR] has followed the decision of Hon’ble Jurisdictional High Court being a binding precedent. Accordingly following the earlier order as well as the decision of Hon’ble Jurisdictional High court, decide this issue in favour of the assessee Disallowance of interest expenses against the income from other sources - HELD THAT:- Order of the AO itself reveals the fact that the borrowed fund was not fully utilized for giving the loans on which the assessee has earned the interest income under section 56 of the IT Act and claimed the interest deduction under section 57(3) of the Act. Once the part of the borrowed fund is utilized for the purpose of business being introduction of capital in the proprietorship concern and partnership firm from where the assessee has earned the business income and offered to tax then the proportionate interest expenditure is an allowable business expenditure. Thus it is only an error of claiming the deduction under correct head but the entire interest was claimed against the income from other sources. As relying on disallowance made by the AO in respect of interest expenditure is deleted.
|