TMI Blog2022 (7) TMI 1220X X X X Extracts X X X X X X X X Extracts X X X X ..... view is fortified by the judgment of the Hon ble Apex Court in the case of Commissioner of Income Tax Vs. Rajendra Prasad Moody [ 1978 (10) TMI 133 - SUPREME COURT] - Thus taking cognizance of the fact that an inextricable nexus between the interest bearing funds raised by the assessee from M/s Dynasty Tradelink Pvt. Ltd. and the interest bearing amounts given to GDR Educational Society is proved to the hilt, therefore, set-aside the order of the CIT(Appeals) and vacate the disallowance of the assessee s claim for deduction under Sec. 57(iii) of the interest paid to M/s Dynasty Tradelink Pvt. Ltd. Rajni Rungta - As we find substance in the claim of the AR as regards the allowability of the assessee s claim for deduction of the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 03.03.2016 for assessment year 2013-14. Before us the assessee has assailed the impugned order on the following grounds of appeal: 1. On the facts and in the circumstances o the case, the learned CIT(A) has erred in confirming the disallowance made by the A.O of Rs.20,08,681/- on account of interest expenses claimed u/s.57 of the Income Tax Act. The disallowance made by the AO and sustained by the Ld. CIT(A) is unjustified, unwarranted and uncalled for. 2. On the facts and circumstances of the case, the learned CIT(A) has erred in confirming the assessed income at Rs.20,08,681/- as assessed by the A.O instead of Rs.15,03,666/- (before claiming deduction u/s.57 of Rs.20,08,681/-). The said assessed income is not correct and is unju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments that have been pressed into service by the ld. AR in order to drive home his contentions. 7. Before us, it is the claim of the Ld. Authorized Representative (for short AR ) for the assessee that both the lower authorities on the basis of misconceived facts had drawn adverse inferences as regards the entitlement of the assessee towards deduction of interest paid on borrowed funds u/s.57(iii) of the Act. Elaborating on his aforesaid contention, it was submitted by the Ld. AR that as the interest bearing amount of Rs.3.60 crore that was raised by the assessee from M/s. Dynasty Tradelink Pvt. Ltd. was to the last of the paisa advanced as interest bearing loans/deposits to GDR Educational Society, therefore, the interest expenditure so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty Tradelink Pvt. Ltd.; and (ii) Smt. Rajni Rungta. We shall hereinafter deal with the claim of the ld. AR as regards the maintainability of the assessee s claim for deduction of the interest paid on the respective interest bearing loans raised from the aforesaid parties, as under : A. Dynasty Tradelink Pvt. Ltd.: Rs.3.60 crores :- 10. On a perusal of the details filed by the Ld. AR before us, we find that the assessee over the period, i.e., 01.09.2012 to 19.11.2012 had raised interest bearing funds of Rs.3.60 crores from M/s. Dynasty Tradelink Pvt. Ltd., which, during the said period were advanced by him on interest to GDR Educational Society. As is discernible from the assessee s bank account No.14352041000406 with OBC bank, Bra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had raised interest bearing amounts from Smt. Rajni Rungta, which, thereafter, were advanced on interest to Shri R.S. Richpal Rungta, therefore, the interest expenditure incurred on the aforesaid interest bearing funds was allowable as a deduction u/s. 57(iii) of the Act. 12. Having given a thoughtful consideration to the issue in hand, we find substance in the claim of the ld. AR as regards the allowability of the assessee s claim for deduction of the interest expenditure on the old loan of Smt. Rajani Rungta which was advanced as an interest bearing loan/advance for earning of interest income. Our aforesaid conviction is supported by the fact that the assessee s claim for deduction of interest paid on the loan raised from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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