TMI Blog2021 (12) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the loan furnished by the assessee. In fact, we are of the view that the learned CIT (A) has given contradictory finding in his order dated 19th March 2019 under section 250 of the Act, which amounts to a mistake apparent from record and the same is liable to be corrected under the provisions of section 154 of the Act. We also note that the assessee before the learned CIT (A) in the proceedings under section 154 of the Act has submitted that, as evident from the statement of facts filed along with rectification application, the loan was taken by the assessee for the purpose of purchasing the equipment, plant, furniture and construction of the cinema building. But the learned CIT (A) in his order under section 154 of the Act without re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation order passed u/s. 154 of the Income Tax Act by the learned CIT(A) - 3, Ahmedabad, your appellant submits following grounds of appeal amongst others for your kind justice. 1. The learned CIT(A) has grossly and grievously, erred in law and on facts by rejecting rectification and disallowing a sum of interest of ₹ 5,40,375/-on secured term loans from bank, without understanding the basic facts and circumstances of the case and therefore, based on the facts and circumstances of the matter, it is prayed to allow all the above noted expenses as claimed by your appellant in full. Your appellant craves a leave to add, alter, amend, and/or modify any of the grounds of appeal on or before the date of hearing. 3. The only is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect to the depreciation on the cinema building, repair /maintenance of the cinema building /lift. However, the learned CIT (A) confirmed the addition with respect to the interest on the loan taken for the construction of the cinema building by observing as under: However, there is no document for proving that the loan was taken by the appellant. In fact, the loan has been taken by the members/concerns of family. There is no document as evidence from the appellant to the banker and vice-a-versa which can prove that the loan was actually sought for specific purpose by the appellant and the loan was granted to the appellant for specific purpose. It is common knowledge that the bankers do put many conditions while granting the loan. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cinema hall building was constructed out of the loan obtained by the assessee. Likewise, the learned CIT (A) has allowed the depreciation to the assessee on the cinema building which evidences that the assessee has incurred the interest cost on such building and therefore the same is allowable. 7. However, the learned CIT (A) disregarded the contention of the assessee by observing as under: The contention of the appellant is considered carefully and on verification of the appellate order passed by this office it is found that there is no apparent mistake while deciding the appeal, the submission of the appellant has been considered and (he appeal is decided on the facts of the case. Accordingly, the application u/s.154 of the IT Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om record. 10.1 In the light of the above stated discussion, we analyze the facts of the case on hand. There was a partnership form namely M/s Rajdeep Automobiles engaged in the business of automobiles show room and works shop. This partnership firm which was operating from the ground floor at 10-B, Kumbhanath Society, Near Avkar Hall, Maninagar, Ahmadabad has taken a loan from the bank for its business purposes. The loan was taken by the firm for its activities on the mortgage of its property from where it was running its business activities. Subsequently one of the party being HUF, consisting of the members who are the partners of the partnership firm namely M/s Rajdeep Automobiles, constructed the cinema hall building on the 1st floo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instalment of loan out of its sale proceeds. The relevant finding of the learned CIT (A) reads as under: The appellant has developed the cinema theatre by obtaining two term loan from Punjab National Bank by providing security in the form of extension of Equitable Mortgage of the land and building owned by the firm of M/s. Rajdeep Automobiles - which is already under equitable mortgage with the same bank in respect of some other loan taken by M/s. Rajdeep Automobiles earlier. Out of the sale proceeds of tickets and other receipts, the appellant has been repaying its loans in installments with interest Accordingly. The upper structure is owned, possessed and used by the appellant for his own business. 10.3 Once the learned CIT (A) h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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