TMI Blog2013 (10) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the deletion made by the CIT (Appeals) and confirmed by the Tribunal – Decided against the Revenue. - TAX APPEAL NO. 580 of 2013 - - - Dated:- 16-7-2013 - M.R. SHAH AND SONIA GOKANI , JJ. For the Appellant : Sudhir M. Mehta. ORDER:- PER : Ms. Sonia Gokani The brief facts leading to this Tax Appeal are as under : 1.1 The assessee is an individual engaged in the business of construction, finance and developer. It carries on the business of finance in the name of Rajiv Enterprises and other activities are undertaken in his personal name. Two separate books of account are maintained. The return of income for the assessment year 2007-2008 was filed by the assessee on October 31, 2007, declaring his total income at Rs.10,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.1,04,24,279/- and the proportionate interest was worked out to be Rs.74,54,390/-. Thus, the total claim of interest expenditure came to Rs.1,16,01,527/- (Rs.41,47,137/-+ Rs.74,54,390/-). 1.4 On bi-partite hearing, the Assessing Officer disallowed total claim of interest expenditure of Rs.1,16,01,527/-. Aggrieved by the same, the respondent-assessee approached the Commissioner of Income-tax (Appeals), which partly allowed the appeal of the assessee. It directed the Assessing Officer to disallow the deduction of interest expenditure to the tune of Rs.33,57,024/- and the balance addition of Rs.82,44,503/- was deleted. The CIT (Appeals) gave the following reasons for the same : "5. In the light of the above, the facts in the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i and of M/s.Rajiv Enterprise, the appellant in majority of cases, has paid interest @12% on its borrowings. However, as regard to the interest receipt, the appellant has received interest @ 12% except in the case of M/s RJD Impex Pvt. Ltd. (Sister concern), wherein interest has been received @6%. The appellant is also paying net interest of Rs.32,72,252/- to the firms, wherein it is a partner. The details of which are as under : Tally of Partners Interest : Interest Payable 1. Hotel Rangoli Rs. 15,80,326/- 2. Raj Corporation Rs.23,02,997/- Rs.38,83,323/- Less : Interest Receivable (Partner) 1. Raj Enterprise Rs.4,07,126/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter referred to as 'the Tribunal') in cross-appeals. After extensive hearing, the Tribunal remitted the matter to the file of the Assessing Officer for clarification so far as the interest charges to M/s.RJD Impex Pvt. Ltd. was concerned. However, as far as the other amount was concerned, it relied upon the finding of the CIT (Appeals) to hold that the interest at the rate of 12% in majority of the cases was received by the assessee and it also paid interest at the rate of 12% and since such facts were not controverted by the Revenue, it did not disturb the finding of the CIT (Appeals). 1.6 Aggrieved by such decision of the Tribunal, the present appeal is preferred under Section 260A of the Income-ttax Act, 1961 (hereinafter referred to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) that the respondent was engaging himself in multiple activities of finance, land dealing, hotel business, etc. For his own convenience, two balancesheets have been prepared, one in his personal name "Shri Rajesh J. Desai" and another in the name of proprietary firm "Rajiv Enterprises", which is engaged in the business of financing. The consolidated balancesheet as on March 31, 2007 had shown negative balance in the capital account. However, this balancesheet had negatived the advance loan to the extent of Rs.13,88,28,243/-. The categorical finding of the CIT (Appeals) has not been controverted by the Revenue that on every transaction entered into by the respondent-Assessee, he has charged the interest. The interest-free funds to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etion made by the CIT (Appeals) and confirmed by the Tribunal. The Assessing Officer is required to cover the issue from the angle indicated in the order itself and after verification, the said direction is required to be flowed. 3.3 We are of the opinion that no error could be noticed in the approach of either of the authorities, much less any perversity which would warrant any interference at our end. 3.4 When it is evident from the record that the assessee carries on business of financing in the name of Rajiv Enterprises as a proprietary firm and when the assessee is in the business of financing, land dealing, hotel business, etc. and if it manages a different trading account for financing, to arrive at profit and loss in different b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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