TMI Blog2019 (11) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... The aggregate capital balance of the partners also reveals that the partners capital account in aggregate is in credit and only the capital of one of the partners is in debit. We are of the view that AO was not justified in disallowing the expenses by noting that no business activity has been carried out by the assessee. We therefore the AO direct to delete the addition made by him. Thus, the grounds of the assessee are allowed. - ITA No.439/PUN/2017 (Assessment year : 2013-14) - - - Dated:- 1-11-2019 - SHRI ANIL CHATURVEDI, AM AND SHRI S.S. VISWANETHRA RAVI, JM Assessee by: Shri V.L. Jain. Revenue by: Shri S.P. Walimbe. ORDER PER ANIL CHATURVEDI, AM : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not pressed. Ground No.2 is with respect to confirming the addition of ₹ 70,13,404/- by Ld.CIT(A). 4. During the course of assessment proceedings and on perusing the Profit and Loss account, AO noticed that assessee has claimed to be carrying on the business of granting loans and earning interests thereon. AO has noted that assessee has failed to establish that the object of the assessee as per in the Partnership Deed permitted it to do the activity of money lending. He also noted that as per Sec.5 of the Bombay Money Lending Act, 1947, no person can carry such an activity of money lending without obtaining a licence to that effect from the Government. He noted that assessee had not obtained any such licence for mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of AO by observing as under : 3.2 I have gone through the facts of the case as mentioned in the assessment order as well as arguments taken on behalf of the appellant. It is noticed that the Assessing Officer in the assessment order has made surgical analysis of profit and loss account and came to the conclusion that various expenses claimed are not related to the earning of income as no business was being carried out by the appellant. It has mainly earned income from capital gain and - income from house property which have been shown and taxed under the respective heads only. It is also noticed that interest expenses paid on bank 'loans are not related to the earning of the interest income. The Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and decisions cited, I hold that the Assessing Officer was perfectly justified in disallowing various expenses claimed as business expenditure to the tune of ₹ 70,13,404/- as the appellant thoroughly failed to discharge its onus as required u/s 37(1) of the I T Act for claiming deduction. The order of the Assessing Officer is - accordingly upheld and the grounds raised are accordingly dismissed. Aggrieved by the order of Ld.CIT(A), assessee is now before us. 5. Before us, Ld.A.R. reiterated the submissions made before the lower authorities and further submitted that the observation made by the AO of money lending business by assessee being not as per the objective of the Partnership Deed is factu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions and perused the material on record. The issue in the present ground is with respect to disallowance of expenses of ₹ 70,13,404/- mainly by holding that assessee has not carried out any business activity during the year. The copy of the Partnership Deed which is placed by the assessee in the Paper Book reveals that one of the activity of the firm is financing as spelt out in the Partnership Deed. We further find that the conclusion of the AO of assessee not having carried out any business activity is also contrary to the facts in view of the fact that in computation of income in the assessment order. AO himself has computed the income of ₹ 19,09,431/- as business income . Further, the aggregate capital balance of the partne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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