9911796707
TMI Blog2018 (10) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) was not justified in upholding the action of AO in making an addition of Rs. 1,12,04,763/- by disallowing the deduction of Interest paid on overdraft facility claimed by the appellant from Interest earned on FDR u/s 57(iii) of the Income Tax Act' 1961by ignoring the fact that the overdraft facility was availed against the alleged FDR to avoid the premature encashment of the FDR on which the alleged interest income has been earned by the appellant. 3. That on the facts and circumstances of the case and in law the Ld. CIT (A) was not justified in upholding the action of the AO in making disallowance of Short term Capital Loss of Rs. 29,19,689/- incurred by the appellant on sales of shares of M/s Varun Industries pledge with the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind favour with the AO who disallowed the claim of deduction on interest expenses and taxed the entire interest income under the head "income from other sources". 6. The assessee carried the matter before the CIT(A) but without any success. 7. Before us, the ld. AR strongly submitted that the earning of interest on FD was a regular source of income and to protect the regular source of income, the assessee had taken over draft facility from the bank on which it paid interest. It is the say of the ld. AR that what is taxed under the head 'income from other sources' is the net interest. For this proposition, strong reliance was placed on the judgment of the Hon'ble Supreme Court in the case of ACG Associated Capsules [P] Ltd 343 ITR 89. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the judgment of the Hon'ble Supreme Court in the case of ACG Associated Capsules [P] Ltd [supra]. Ground No. 1 is accordingly allowed. 11. Next grievance relates to disallowance of short term capital loss of Rs. 29,19,689/-. 12. Facts on record show that pursuant to an agreement with Swati Rajesh Shah, the assessee lent Rs. 90 lakhs from which Swati Rajesh Shah purchased 77000 shares of M/s Varun Industries. Swati Rajesh Shah pledged the shares with the assessee as security against loan of Rs. 90 lakhs. Subsequently, the assessee sold the shares of M/s Varun Industries which were purchased @ 116.88 and sold at different prices varying from 10.28 to 14.05. Loss in sale of shares was claimed as short term capital loss by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
