TMI Blog2004 (8) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds have been raised by the revenue in all these four appeals, the only grievance of the revenue is that the total interest income of the assessee should be assessed under the head Income from other sources and total interest payment should be deducted from business profits only. 2. Briefly stated, the facts of the case are that the assessee has received gross interest of Rs. 2,15,531 in assessment year 1989-90, Rs. 2,62,026 in assessment year 1990-91, Rs. 29,95,037 in assessment year 1992-93 and Rs. 9,13,595 in assessment year 1993-94. It was claimed by the assessee that the interest income is assessable under the head Income from business in all these four years; whereas, the Assessing Officer assessed the same under the head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present appeals also, the issue should be set aside with similar directions to the Assessing Officer. 4. As against this, it was contended by the learned DR of the revenue that a categorical finding has been given by the learned CIT(A) in his order for assessment year 1989-90 that the interest income earned by the assessee is assessable under the head Income from other sources ; and the same is followed by him in remaining three years and, therefore, the entire income has to be excluded from business income for the purpose of calculating deduction under section 80HHC. Regarding interest expenditure, it was contended by him that the same should be considered as business expenditure and no set off should be allowed under section 57 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held by the Tribunal that interest expenditure can be set off against interest income only if the assessee can prove and establish that borrowed money was utilized for earning interest income and this burden is upon the assessee to establish that borrowed money is utilized for giving advances on which the interest was received. We find that learned CIT(A) has allowed deduction of interest expenditure under section 57( iii ) without examining this aspect that the borrowed funds were utilized for earning interest income; and therefore, in the interest of justice, we are of the considered opinion that this matter should go back to the file of the Assessing Officer to examine this aspect of the issue and then decide the issue afresh and there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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