TMI Blog2018 (10) TMI 1354X X X X Extracts X X X X X X X X Extracts X X X X ..... the very same assessee for the A.Y. 2008-09, had deleted the addition made by the A.O. This decision of the CIT(A) was once again confirmed by the ITAT. For that A.Y. the ITAT held that if the interest is paid by the assessee on the capital used for acquiring or construction of the assets that are used for earning taxable income, then his claim for interest expenditure has to be allowed. The relevant finding of the Tribunal for the A.Y. 2008-09. ITAT held that there was no justifiable reason to interfere with the decision of the CIT(A). - INCOME TAX APPEAL (IT) NO. 370 OF 2016 - - - Dated:- 24-9-2018 - MR S. C. DHARMADHIKARI AND MR B. P. COLABAWALLA, JJ. For The Appellant : Mr Suresh Kumar For The Respondent : Mr Niraj Seth I/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.82 Crores. The A.O. was of the view that out of the total income as reflected in the profit and loss account of the assessee, the income from sub-lease of land amounting to ₹ 7.15 Crores had to be assessed under the head incomes from other sources rather than business income . He was, therefore, of the opinion that the ' business loss ' could not be set off against such income. The A.O. was of the view that in the absence of any business activities, the assessee was not entitled to claim the business loss. The A.O. further disallowed the interest on borrowed capital on the ground that the assessee could not substantiate its claim that the borrowed capital was exclusively utilised for acquisition of construction of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal taken by the assessee before the First Appellate Authority was that the A.O. erred in making an addition on the ground of notional income on deposit for arriving at only value of the house property and disallowing the claim for deduction under Section 24(b) of the I.T.Act, 1961 (in part). The First Appellate Authority, after considering the facts of the case came to a finding that this issue also came up for consideration before it in the assessee's own case for the A.Y. 2009-10 as well as in earlier A.Ys. and which was decided in favour of the assessee. In these facts, even on this ground the First Appellate Authority [CIT(A)] set aside the order of the A.O. 5. Being aggrieved by the order of the CIT(A) dated 24th June, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same came to be rejected on 9th July, 2015 for non-compliance of the Bombay High Court (Original Side) Rules, 1980. He submitted that larger public interest would suffer grossly in the event we do not allow him to point out the legal errors in the order passed by the Tribunal for the A.Y. 2009-10, especially since it was followed for the A.Y. 2010-11. Not\ to cause any prejudice to the revenue we acceded to this request and that is how even Income Tax Appeal (L) No. 199 of 2015 was tagged along with this appeal. 7. Be that as it may, in the facts narrated by us earlier, Mr Suresh Kumar submitted before us that the impugned order gives rise to the following substantial questions of law which read thus- ( 1) Whether on the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar further submitted that the ITAT did not consider the findings of the A.O. that the interest claimed as a deduction from rental income could not be permitted when the borrowed funds did not have any nexus with the construction or acquisition of these properties. He further submitted that the ITAT had ignored the proviso to Section 24 of the I.T.Act, 1961 that require production of a certificate from the person to whom interest is payable to the extent the is interest payable on capital borrowed for the purpose of acquisition or construction of the property. For all these reasons, Mr Suresh Kumar submitted that the impugned order gave rise to substantial questions of law and as reproduced by us above. He, therefore, as a consequence, pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id by the assessee on the capital used for acquiring or construction of the assets that are used for earning taxable income, then his claim for interest expenditure has to be allowed. The relevant finding of the Tribunal for the A.Y. 2008-09 is at para 15 of the said order. Taking this into consideration, the ITAT held that there was no justifiable reason to interfere with the decision of the CIT(A). Looking to the findings given by the ITAT and considering that for the earlier A.Ys. the ITAT has already held in favour of the assessee, following the rule of consistency, we do not think that the questions as framed in the present appeal give rise to any substantial question of law. Further, we do not find that the impugned order either suffe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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