9911796707
TMI Blog2023 (2) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee against the income from other source. 3. That the order of the Ld. Commissioner of Income tax (APPEAL) is bad in law. 4. That both the lower authorities have failed to appreciate the income under the head "Income from other sources" would be taxed only after netting off the same against interest paid." 2. Briefly stated the facts are that assessee filed return of income on 15.10.2015 for the AY 2015-16 declaring total income of Rs.27,41,380/-. The assessment was completed on 08.12.2017 u/s 143(3) determining income at Rs.1,05,23,064/-. While completing the assessment the Assessing Officer denied the claim for set off of interest paid by the assessee to banks against interest received by the assessee on the loans advanced to various parties. In the course of assessment proceedings the Assessing Officer required the assessee to justify the claim for set off of interest paid against interest received. The assessee replied that during the FY 2013-14 she has taken loans against property from NBFC's and other financial institutions on which she was paying interest and she had given loans to Companies on which she earned interest, therefore, interest paid has been claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... real estate as erroneously observed Ld. CIT(A) but loan was taken against property. It is submitted that assessee is a woman of means having a status and a decent standard of living and is well to do in this age of life. It is submitted that on a careful perusal of the paper book it would be observed that a copy of Certificate of Interest Paid from Indiabulls Home Loans dated 24-08- 2017, for the instant assessment year i.e., 2015-16 PB (Pg. 8) and certificate dated 19-10-2016 (PB Pg 9), specifying the breakup between interest and principal component and the amount of interest paid, copy of ledger account of various banks from which loan in taken against property as mentioned in the books of assessee [PB Pg 96 - 115], copy of bank statement of ICICI Bank annexed at Page 14 of the Paper-book specifically mentioned that the said 'loan is against property' and not 'for property'. It is submitted that Ld. CIT(A) did not appreciate the submission given from pg 15-18 along with ledger accounts of various parties placed at Pg 19 to 40 that all the loans were granted in order to earn interest and the loan was granted after receiving the same from financial institutions against property own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest was paid to any financial institution. In previous year i.e., AY 2011- 12 interest was less as against income earned from parties. The assessee wants to enhance its interest income from parties and started granting loans after getting the loan against the property and in AY 20I8-19 the interest paid to bank was quite less than interest earned from parties. The income earned therefore was on account of prudent business woman who in some year did not gain much but maintained relationships and ultimately interest paid to bank was substantially reduced. The revenue authorities cannot sit on the arm chair of a business woman who is earning income and making relations in order to earn interest income from various parties as banks are not paying much interest while private parties are paying more interest. The loans granted were returned but assessee cannot presume unexpected returns and regularly paying interest to financial intuitions who normally deduct amount on pre payment of loan due to which it is the decision of man or woman to decide what amount to be granted as loan after examining the financials of loan recipient due to which in some years she incurred loss also. From ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment years 2011-12 onwards and the assessments were completed u/s 143(3) of the Act accepting the claim of the assessee. All the assessments right from the AYs 2011-12 to 2018-19 were completed u/s 143(3) of the Act accepting the claim of the assessee except during the year under consideration i.e. 2015-16 and the details are as under : AY Income returned Income Assessed Interest received from parties (PB pg) Interest paid to financial institutions/Banks for granting loans Nature of addition, if any 2011-12 6,38,030/- (PB Pg 41) 6,38,030/- (Pg 44) 8,55,975/- (Pg 41) 5,74,645/- (PB 41) Income returned accepted u/s 143(3), PB 44 2012-13 10,50,470/- (Pg 48-50) 17,21,804/- (PB 53) 5,91,700/- (PB Pg 48) - No such issue as no interest paid to bank. 2013-14 10,86,160/- (PB Pg 54) 10,86,160/- (PB 57) 16,29,459/- (PB 54) 34,42,284/- (PB 54) Income returned accepted u/s 143(3), PB 57 2014-15 63,14,940/- (PB Pg 67-68) 63,14,940/- (PB 61) 48,17,394/- (PG 68) 50,29,894/- (PB Pg 68) Income returned accepted u/s 143(3), PB 61 2015-16 27,41,380/- (PB Pg 1-3) 1,05,23,064/- (PB 4-6) 66,96,097/- (PB 1) 67,56,682/- (PB 1) Disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possibility of availing of either of these gateways, may yet differ with the view expressed and refer the matter to a Bench of superior strength or in some cases to a Bench of superior jurisdiction." 11. The principle accepted by the Revenue for the earlier four assessment years and three subsequent assessment years to the assessment year under consideration was that the assessee has been taking loans from the banks and financial institutions and the same were lent to various other companies for earning interest income and the claim for set off of interest paid to banks/financial institutions was allowed against interest earned by the assessee u/s 57 of the Act. Since the Revenue was accepted the principle consistency in earlier assessment years and also in subsequent assessment years there is no justification and deviating from the said principle only for the assessment year under consideration i.e. AY 2015-16. 12. The Hon'ble Delhi High Court in the case of Vodafone South Ltd. Vs. CIT (supra) held that where assessee having availed of loan from HSBC advanced said amount to its holding company there was a direct nexus between earning of interest on loan advanced by assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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