TMI Blog2018 (11) TMI 1434X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes and the so called loan from the college was held to be the assessees' own funds. Here too there was no business in finance carried on by the Firms and the partners had merely taken advances from the firm, the application of which was not the concern of the firm. We, hence, find that the advances obtained by the partners were not in the nature of business carried on by the assessee and, hence, there could be no claim of business expenditure insofar as the interest paid to the depositors, the public. We, hence, answer the other questions of law framed against the assessee and in favour of the Revenue. We delete the order of the Tribunal insofar as the allowance of interest expenditure under Section 37. The order of the AO disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the facts and in the circumstances of the case-, ( a) The withdrawals from the firm by the partners partakes the character of a loan given for business purposes? ( b) the ITAT is right in law and fact in interfering with the protective addition? 2. On facts, it has to be noticed that the respondent-assessee in I.T.A.Nos.136 and 147 of 2011 carries on a Multi Speciality Hospital and the respondent-assessee in I.T.A.Nos.140 and 142 of 2011 carries on Real Estate business. The Multi Speciality Hospital had a Resources Division and the Real Estate firm also had such a division which accepted deposits from the public. The amounts so deposited by the public were withdrawn by the partners and invested in other sister concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of finance carried on by the assessee. 4. The first appellate authority sustained the addition to the income; but, however, deleted the expenditure claimed. The first appellate authority found that the findings of the AO were mutually destructive. If the assessee was engaged in the business of finance and earned interest income far in excess of that received by the assessee-firms from its partners; then necessarily the expenditure by way of interest paid to the public who had deposits with the assessee-firms was to be allowed under Section 37 of the IT Act was the finding; with which we agree on principle. 5. Before the Tribunal, separate appeals were filed by the assessee and the Revenue. The Tribunal in the appeal of the assessees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han that they were paying to the assessee-firms could be assessed at the hands of the sister concerns or in the hands of the partners on which we need not give any specific opinion since that is not the subject matter of the present appeals. With respect to the present appeals and the assessments made on the assessee-firms, we are of the definite opinion that there could be no addition made under Section 145. We uphold the order of the Tribunal insofar as deleting the additions made. We answer the first question of law to the extent that it speaks of interference of substantive additions made to the interest income received by the assessee-firms, in favour of the assessee and against the Revenue. We uphold the findings of the Tribunal on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business expenditure. The overdraft facility was held to be not availed for business purposes and the so called loan from the college was held to be the assessees' own funds. Here too there was no business in finance carried on by the Firms and the partners had merely taken advances from the firm, the application of which was not the concern of the firm. 9. We, hence, find that the advances obtained by the partners were not in the nature of business carried on by the assessee and, hence, there could be no claim of business expenditure insofar as the interest paid to the depositors, the public. We, hence, answer the other questions of law framed against the assessee and in favour of the Revenue. We delete the order of the Tribunal ins ..... X X X X Extracts X X X X X X X X Extracts X X X X
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