TMI Blog2016 (12) TMI 1831X X X X Extracts X X X X X X X X Extracts X X X X ..... r AO assessee has not shown the parties for which the loans were borrowed and the interest was disallowed - HELD THAT:- Assessee has borrowed the amount for the purpose of investment in other firms as capital of the assessee - when the assessee borrowed funds for the purpose of investment in other partner firms, it cannot be allowed as deduction as income earned from firm is not feasible while com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax(Appeals)-2, Chennai dated 31.03.2016. 2. The only issue in this appeal is with regard to disallowance of interest paid on loans. The assessee claimed interest amount of ₹7,36,579/- on accrual basis. The said interest was accrued on the loans borrowed in earlier years and there is no actual payment of this interest to the parties. The AO observed that the assessee has not shown the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned from firm is not feasible while computing the income of the assessee. This view is fortified by the judgment of the Kerala High Court in the case of CIT Vs. Popular Vehicles and Services Ltd., in [2010] 325 ITR 523(Ker.) It is to be noted that in earlier assessment years, there was no assessment u/s.143(3) and the return was accepted only u/s.143(1) of the Act without any scrutiny. It canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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