TMI Blog2022 (11) TMI 1297X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee before us has demonstrated that rate of interest earned at 6% per annum for the time period of loans and advances is for particular set up of loans and advances. Similarly borrowed loan at 6% was also there in the relevant A.Y. There was 0% return of income on borrowing of unsecured loan and the same was detailed before the AO as well as CIT(A). There was not a single case of non-charging interest or interest free loans while giving the loans by the assessee. Therefore, AO as well as the CIT(A) has made the addition on presumptive and assumptive percentage of charging of interest. The expenditure incurred was wholly and exclusively for the purpose of business of land trading and the same was also explained by the assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions, it is submitted that the whole of the interest expenditure is allowable as business expenditure u/s.36(1)(iii). Considering all the above submissions, your good self is requested to delete the said disallowance of interest of Rs.21,57,962/- and oblige. 3. The assessee is an individual and derived income as share in profit, remuneration and interest on capital from partnership firm as well as interest and dividend income. The assessee filed return of income on 29.09.2015 declaring total income at Rs.12,34,360/-. The assessee also declared agricultural income of Rs.1,91,240/-. The Assessing Officer observed that the assessee claimed deduction of interest expenses of Rs.26,58,136/- as business expenses. The Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod of loans and advances given to the respective persons hence calculating the interest with the closing outstanding is a loan method. In the present case rate of interest earned is at 6% per annum from the respective period of loans given and the outstanding of such loan at the year end was Rs.1,14,52,340/-. Similarly, the assessee also borrowed loan at 6% during the year and the outstanding of such loan borrowed at the year end is Rs.2,42,65,216/-. Similarly, the assessee also charged loan at 0% during the year and the outstanding of such loan borrowed at the year end is Rs.2,42,65,216/-. Similarly, there are 0% return of income on borrowing of unsecured loan, outstanding of which at the year end is Rs.56,09,043/-. As regards the loans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- there is outstanding of interest-bearing of loans and advances of Rs.1,14,52,340/- and hence the net outstanding interest-bearing borrowed funds are Rs.2,44,58,280/-. As against the same, the closing stock of land is Rs.2,86,27,278/- and hence total business assets in form of closing stock of lands and loans advances are totalling to Rs.4,00,79,618/- which is higher than the interest-bearing borrowed fund of Rs.3,59,10,620/-. Hence business asset are higher than the interest-bearing borrowed funds. Thus, the ld. AR submitted that the Assessing Officer as well as the CIT(A) was not just in making the addition. 6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 7. Heard both the parties and perused all the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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