TMI Blog2017 (12) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... ome is to be taxed under the head ‘income from business’. Therefore, no deduction is allowable u/s 36(1)(iii) in respect of interest paid by the assessee and claimed as allowable expenditure because as per the sec. 36(1)(iii), interest is allowable if it is incurred in respect of capital borrowed for the purpose of business. Since there is no business activity, no deduction is allowable u/s 36 (1)(iii). Disallowance of fund raising charges - contentions of the assessee were same that the same is allowable as interest expenditure u/s 36(1)(iii) because as per the provisions of sec. 2(28A) interest includes services fee or other charges in respect of money borrowed or debt incurred or in respect of any credit facility which has not been ut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Income Tax (Appeals) erred in giving a finding that, the appellant had not commenced the business and hence the interest expenses is not allowable, ignoring the fact that, the appellant was already setup and ready for business and under the circumstances, the interest expenses could not have been disallowed. 4. The learned Commissioner of Income Tax (Appeals) erred in not appreciating the fact that, the appellant had received interest income on advances made and the interest expenses if not allowable under the head business should have been allowed under the head other sources, wherein the interest income has been considered for taxation. 5. The learned Commissioner of Income Tax (Appeals) erred in not appreciating th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... head other sources and if the expenditure is not allowable under the head business, should have been allowed under the head other sources, since the expenditure was revenue in nature and required for day to day running of the company. 11. It The learned Commissioner of Income Tax (Appeals) erred in not following the ratio taid down by the Hon'ble Supreme Court in the case of CIT V. M/s.Sarabhai Management Corporation Ltd (1991) 192 ITR 151 (SC). 12. The appellant craves permission to add, delete or alter any of the grounds at the time of hearing. Prayer The appellant prays that, the Honourable Tribunal to kindly delete the addition consequent to i) Disallowance of interest paid on borrowed capital of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted by the ld AR of the assessee that there is no stock in trade and in my considered opinion, in the facts of the present case, it cannot be said that the assessee is doing any business activity and any income is to be taxed under the head income from business . Therefore, no deduction is allowable u/s 36(1)(iii) in respect of interest paid by the assessee and claimed as allowable expenditure because as per the sec. 36(1)(iii), interest is allowable if it is incurred in respect of capital borrowed for the purpose of business. Since there is no business activity, no deduction is allowable u/s 36 (1)(iii). Hence, I reject these grounds. 6. Regarding ground Nos. 6 and 7, it was submitted by the ld AR of the assessee that the issue i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es ₹ 238/-. In this regard, my attention was drawn to page Nos.7 and 8 of the paper book, where the written submissions are made in respect of this issue. The assessee has placed reliance on the following judicial pronouncements at page 8 of the paper book :- i) CIT Vs. Sarabhai Management Corporation Ltd., (1991) 192 ITR 151 (SC) ii) SPPS Systems (P) Ltd., Vs. DCIT (2015) 154 ITD 465 (Hyd- Trib) iii) CIT Vs. Aspentech India (P) Ltd., (2010) 187 Taxman 25 (Delhi) iv) CIT (Central), Ludhiana Vs. Majestic Auto Ltd., (2013) 38 Taxmann.com 214 (P H) v) CIT Vs. Rampur Timber Turnery Co., Ltd., (1981) 6 Taxman 241 (All) vi) Preimus Investment and Finance Ltd., Vs. DCIT (ITAT Mumbai) 9. The ld DR ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assesee s business has commenced but in the present case, the facts are totally different. It is seen that in the present case, no activity was undertaken by the assessee which can be said to be business activity. Therefore, in the facts of the present case, this judgment is rendering no help to the assessee. 12. The second judgment cited is of the Tribunal rendered in the case of SPPS Systems (P) Ltd., Vs. DCIT (Supra). In that case, the assessee company employed a software professional and paid services charges and incurred other expense and the assessee could not get any work and hence, no business activity was disclosed by the assessee. Under these facts, it was held by the Tribunal in that case that there was business activity tho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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