TMI Blog2023 (4) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... principle of consistency, particularly in a situation where there was no change in the facts. In holding so, we draw support and guidance from the judgment of PCIT vs. Quest Investment Advisor (P.) Ltd. [ 2018 (7) TMI 479 - BOMBAY HIGH COURT] - Appeal filed by the assessee is allowed. - ITA No. 526/AHD/2020 - - - Dated:- 24-3-2023 - SHRI WASEEM AHMED, ACCOUNTANT MEMBER For the Assessee : Shri Suresh Thakkar, A.R For the Revenue : Shri Purushottam Kumar, Sr. D.R ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-3, Vadodara, dated 08/09/2020 arising in the matter of assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Against business income Interest paid to Vijay Shah Rs.1,10,000/- Interest paid to Bhanumatiben Shah Rs.10,31,122/- Interest paid to Kalpana Shah Rs.3,17,329/- Against Other income Interest paid to Central Bank of India Rs.6,09,588/- Interest paid to Gopi India Pvt Ltd. Rs.2,40,000/- Interest paid to Vasantlal Shah HUF Rs.1,54,324/- Interest paid to Sahil B Shah Rs.4,456/- 5. The assessee during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom Smt. Bhanumatiben Shah was not explained. Thus the AO disallowed the same. In the result, the AO disallowed interest expenses of Rs. 20,43,446/- and added to the total income of the assessee. 7. The aggrieved assessee preferred an appeal before the learned CIT(A). 8. The assessee before the learned CIT(A) submitted that the AO in the show cause notice sought explanation for payment of interest expenses of Rs. 10,08,368/- claimed against income from other sources. However, the AO made disallowances of interest expenses of 20,43,937/- which should not be accepted. 8.1 The Assessee besides reiterating its submission during assessment proceedings, further submitted that fresh loan received during the year were either utilized for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. It was further submitted that ii was not possible for the appellant to prove nexus of particular income with particular expenditure (Interest). It is well settled position of law that any deduction of expenditure either in computation of income from other sources or in computation of income from business and profession shall be allowed provided expenditure was incurred for the purpose of business. Here it is clear that the appellant had failed to prove the nexus of income and expenses claimed against it during the assessment proceedings as well as current proceedings. From the discussion in the assessment order it is clear that the appellant could not prove that funds borrowed are used wholly and exclusively for generation income from o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pper and M/s Shah Co Faraskhana Store. The AO in the assessment order disallowed the interest expenditure of Rs. 20,43,936/- which includes disallowances Rs, Rs. 10,08,368/- and further disallowances of Rs. 10,35,568/- claimed against income from firms. The disallowance made by the AO was also confirmed by the learned CIT(A). 13.1 In this respect, we find that assessee in the immediate preceding assessment year i.e. A.Y. 2011-12 made identical claim of interest expenditure paid to same parties against the income from firm and income from other sources. The return of the assessee for A.Y. 2011-12 was selected for scrutiny assessment through CASS. During the assessment proceeding of A.Y. 2011-12, a question with regard to claim of intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been mentioned either in the assessment order or atleast pointed out to the Tribunal when it passed the impugned order. None of this has happened. In fact, all have proceeded on the basis that there is no change in the principle which has been consistently applied for the earlier assessment years and also for the subsequent assessment years. Therefore, the view of the Tribunal in allowing the respondent's appeal on the principle of consistency cannot in the present facts be faulted with, as it is in accord with the Apex Court decision in Bharat Sanchar Nigam Ltd.'s case (supra). 13.2 Thus in view of the above and considering the fact that the identical claim has been accepted by the Revenue in preceding year, we hereby set asid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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