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TMI Blog2014 (2) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... . The appeals raising common issues, were heard together, and are being disposed of vide a common, consolidated order. 2. The first ground in all the appeals impugns the disallowance of interest expenditure incurred on unsecured loans, which has been claimed by the assessee as deduction against interest income assessable under the head 'income from other sources'. The Revenue has dismissed the assessee's claim on the basis of absence of a nexus having been shown between the borrowed capital and its utilization for earning interest. Even as the facts for all the years are broadly similar, the same would have to be dealt with separately in view of the differences nevertheless attending the same. 3.1 For A.Y. 2005-06, the interest expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee has disclosed business income by way of interest on capital, to the extent of Rs.1,81,256/-. Apparently, therefore, part of the borrowed capital has been utilized for investment in partnership firms for earning interest. The same would qualify for deduction u/s. 36(1)(iii); the interest income being assessable as business income u/s.28. As regards the presumption with regard to whether it is the borrowed or own funds which stands invested in the partnership firms, we would like to clarify that the wide variation between the interest received as well as paid would itself show that the funds invested are much higher than that borrowed, for which the interest is paid, so that the difference would only be on account of investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s agitated by the assessee per its ground no. 4, has decided the same by restoring the matter back to the file of the A.O., who had worked out the same in terms of Rule 8D , for working out the disallowance on a reasonable basis in compliance with the direction by the hon'ble jurisdictional High Court in the case of Godrej & Boyce Manufacturing Co. Ltd. vs. Dy. CIT [2010] 328 TR 81 (Bom). The ld. AR, when confronted with the said directions by the first appellate authorities, per paras 21 & 22 of his order, could not point to us any cause of grievance to the assessee, except for an apprehension that the A.O. may not observe the directions of the first appellate authority in letter and spirit. We find no reason to interfere with the clear di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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