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2024 (1) TMI 1074 - ITAT DELHIAllowability of Interest Expenditure - disallowance on the ground that the borrowed funds were utilized for non-business purposes - Condonation of delay of 418 in filing the appeal - AO observed that the assessee had claimed deduction on account of interest expenditure - AO proceeded to disallow the entire interest u/s 14A of the Act on the ground that borrowed funds were utilized for making investments in securities and shares which had yielded exempt income to the assessee and completed the assessment - CIT(A) however, addressed the entire dispute on the ground that the borrowed funds were utilized for non business purpose in terms of section 36(1)(iii) HELD THAT:- The assessee was pursuing an alternative remedy available with him legally before the ld. CIT(A) by waiting for disposal of rectification application. - The reasons adduced by the assessee for the delayed filing of appeal is sufficient cause - Delay condoned. The assessee had furnished the complete details of borrowed funds together with its utilization thereon before the ld CIT(A) and pleaded that the interest paid on borrowed funds would be eligible for deduction. CIT(A) sought for a remand report from the ld AO who indeed submitted the remand report, clearly giving the details of utilization of borrowed funds. This remand report has not been properly appreciated by the ld CIT(A) while dismissing the appeal of the assessee. Considering the fact that the ld AO had given the remand report and that remand report was very much available before the ld CIT(A), CIT(A) ought to have considered the observations given by the ld AO in the remand report. Hence, we deem it fit and proper to restore this quantum appeal to the file of ld CIT(A) qua the issue in dispute before us with regard to disallowance of interest for re-adjudication in the light of remand report submitted by the ld AO. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.
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