TMI Blog2017 (6) TMI 979X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-3-2017 - SHRI D.T.GARASIA (JM), AND SHRI RAMIT KOCHAR (AM) For The Appellant : Shri. Prakash Jhunjhunwala For The Respondent : Shri. Rajesh Kumar Yadav ORDER PER D.T.GARASIA, AM This appeal is filed by the Assessee against the order of Ld. CIT(A)-12 Mumbai, dated 29/07/2013 for the Asst. year 2008-09 arising out of order of ITO-6(2)(4) Mumbai dated 27/12/2010 passed u/s 143(3) of the Income Tax Act, 1961(in short the Act ). 2. The only ground i.e. ground No. 1 raised in this appeal reads as under:- 1. On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the further disallowance of interest of ₹ 48,89,648/- on restricting the interest expense to the extent of interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest earning loans and advances which establishes direct nexus hence interest expenses and income is to be rightly set off. The assessee is in the business of Trading in properties and marketing of goods and not in the business of money lending. The assessee s contention was that the surplus funds was parked for earning the interest was not denied but the interest earned was to be taxed under the head of income from other sources. The assessee preferred appeal before the CIT(A) and the Ld. CIT(A) after considering the submission of the assessee, dismissed the appeal filed by the assessee. 5. During the course of hearing the Ld. AR submitted that the said interest expenses has to be allowed as business expenditure and the Tribunal ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntions of both the parties during the course of hearing and also perused the material available on record. We find that the Tribunal has decided this issue by considering the various judgments including the decision of Hon ble Apex Court in the case of CIT vs. Rajendra Prasad Modi, 115 ITR 519 whereby the Tribunal has verified and worked out the capital expenditure of the assessee and calculated interest bearing funds and non-interest bearing fund. We, respectfully following the same, are of the view that the assessee is entitled for part relief. For reference, we reproduce hereunder the decision of Mumbai Bench of this Tribunal in ITA No. 7638/M/2012 for Asst. year 2007-08 in the case of Kavita Marketing Private Ltd. which reads as under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ex court held that legitimate expenditure incurred by assessee for the purpose of earning of income are allowable notwithstanding the fact that whether that purpose has been fulfilled or not. There is no requirement that the purpose should fructify into any benefit by way of return in the shape of income so as to claim the expenditure. It is not necessary that any income should in fact have been earned as a result of the expenditure. The deduction of the expenditure cannot be held to be conditional upon the making or earning of the income. Accordingly, we are of the considered opinion that legitimate expenditure incurred by assessee for the purpose of earning income are allowable u/s 57(iii) notwithstanding the amount of actual income earne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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