TMI Blog2014 (4) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... laim in her return of income. However, it is also a fact that assessee had endeavoured to set off the loss against her interest income, which was not allowed by the Assessing Officer. Hence, it is not that there was no claim of loss at all. We are, therefore, of the view that ld. CIT(Appeals) acted well within his powers, when he directed the Assessing Officer to allow the carry forward of short-term capital loss - Decided against revenue Disallowance of interest - Held that:- The profits were sufficient to meet the advance tax liability and the profits were deposited in the overdraft account of the assessee and in such a case it should be presumed that the taxes were paid out of the profits of the year and not out of the overdraft accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In her appeal before the ld. CIT(Appeals), contention of the assessee was that investments were of single premium equity linked insurance policies, which were surrendered in the same year itself resulting in a loss of ₹ 25,88,837/-. Such single premium equity linked insurance policies were taken out by the assessee with a view to make gains, and these were invested by the Fund Managers in Mutual Funds. Since assessee lacked the expertise and skill required to make such investment in Mutual Funds, she had done it through M/s. Bajaj Allianz. Therefore, according to the assessee, the loss on surrender though not adjustable against the interest income under the head income from other sources , it should be allowed as short-term capital l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital loss. It s only grievance is that assessee had not made such a claim before the ld. CIT(Appeals). It is true that assessee had not made the claim in her return of income. However, it is also a fact that assessee had endeavoured to set off the loss against her interest income, which was not allowed by the Assessing Officer. Hence, it is not that there was no claim of loss at all. The claim was there but made under a wrong head. Decision of the Hon ble Apex Court in the case of Goetze (India) Ltd. (supra) does not in any way dilute the power of Appellate Commissioner in granting relief to an assessee, which is otherwise legitimately due to it. We are, therefore, of the view that ld. CIT(Appeals) acted well within his powers, when he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch loans. Therefore, as per the assessee the nexus between the Fixed Deposits and loans stood established. Further as per the assessee she was having a capital of ₹ 2,09,71,622/- and interestfree loans of ₹ 4,48,55,040/- received from her husband. 11. Ld. CIT(Appeals) was appreciative of the above contentions. According to him, assessee was having sufficient interest-free loans for giving the advances to two concerns. Further, according to him, assessee could establish the nexus between the Bank loan and deposits. Therefore, he held that interest paid could be claimed as a deduction from the interest received on Fixed Deposits. 12. Now before us, ld. D.R. strongly assailing the order of ld. CIT(Appeals) submitted that ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs.- Reliance Utilities and Power Ltd. (supra) at para 10 of its order had held as under :- If there be interest-free funds available to an assessee sufficient to meet its investments and at the same time the assessee had raised a loan it can be presumed that the investments were from the interest-free funds available. In our opinion, the Supreme Court in East India Pharmaceutical Works Ltd. (supra) had the occasion to consider the decision of the Calcutta High Court in Woolcombers of India Ltd. (supra) where a similar issue had arisen. Before the Supreme Court it was argued that it should have been presumed that in essence and true character the taxes were paid out of the profits of the relevant year and not out of the overdraft accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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