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2021 (4) TMI 665 - AT - Income TaxDisallowance of interest - As interest earned by the assessee would be assessable as income from other sources and the netting off of the interest cost could not be allowed - HELD THAT:- As certain assets as well as liabilities delved upon assessee pursuant to agreement dated 30/03/2013 with its holding company wherein it was agreed that Lohegaon project would be carried out by the assessee. The differential of assets and liabilities was treated as loan from M/s BEBL to the assessee for which the assessee paid interest expenditure of ₹ 398.52 Lacs during the year. The assessee also earned interest income from loan granted by its holding company to M/s GBL which was also transferred to the assessee under the said agreement. The net interest, thus earned, has been offered to tax. We find that there is clear nexus between the interest income as well as interest expenditure. As rightly noted by Ld. CIT(A), it was not the case the case where the funds were borrowed for the purpose of business and the excess funds were parked by the company for earning interest income. This was a case where the funds for the Lohegaon project were transferred separately and the loan to GBL in the books of the holding company was transferred to the assessee along with equal liability. There was a direct nexus of loan (asset) with loan (liability) in the books of the assessee company. These findings remain undisturbed before us also. Therefore, we find no reason to interfere in the impugned order. The appeal stand dismissed. Facts are pari-materia the same in AY 2015-16 wherein interest income has been assessed under the head Income from Other sources whereas interest expenditure has been disallowed while framing an assessment on 28/12/2017. The Ld. AO follows the logic of AY 2014-15. The Ld. CIT(A) deleted the disallowance on similar findings, against which the revenue is in further appeal before us. Facts and issues being identical, following our adjudication as for AY 2014-15, we dismiss the appeal.
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