TMI Blog2023 (4) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... fit to use the said loan funds by making investment in fixed deposits with ICICI Bank and State Bank of Patiala. Hence, it is crystal clear that loan funds received by the assessee were directly utilized for making investment in fixed deposits. Admittedly, the interest income earned on fixed deposit is taxed under the head of interest income u/s 56 of the Act. The provisions of section 57(iii) of the Act categorically provide for allowability of deduction of interest expenditure that has been incurred for the purpose of earning exempt income. When the claim has been in accordance with the statutory allowable provision by the assessee, the action of the lower authorities dismissing the plea thereon without even considering the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NT MEMBER For the Appellant : D R Anthwal , Advocate For the Respondent : Mr. Kanv Bali , SR - DR ORDER PER M. BALAGANESH AM : These appeals of the assessee arise out of the common orders of the Learned Commissioner of Income Tax (Appeals)-11, New Delhi, [hereinafter referred to as Ld. CIT(A) ] in Appeals No.79/17- 18, 305/16-17, 134/17-18 dated 26/09/2019 against the orders passed by Ld. Asst. CIT, Circle-32(1), New Delhi (hereinafter referred to as the Ld. AO ) u/s 143(3) of the Income Tax Act (hereinafter referred to as the Act ) on 23/02/2016, 30/12/2016 and 07/12/2017 for the Assessment Years 2013-14, 2014-15 and 2015-16 respectively. 2. The facts of the case are identical in all the issues and grounds r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, Sector-63, Noida. Since, permission was not allowed for the said construction by the competent authority, the assessee had deployed the funds in fixed deposits and earned interest income thereon. Since the loan was already borrowed, the assessee had to pay interest on the said loans. The assessee claimed expenses on account of interest u/s 57 (iii) of the Act. Though the assessee paid interest on its loan higher than the interest income, the assessee restricted the claim of deduction of interest payment only to the extent of interest income u/s 57(iii) of the Act. There is no dispute that assessee is carrying on the business of manufacturing of corrugated boxes under the name and style of M/s A.K. Industries (proprietory concern) at D-23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e loan taken from ICICI Home Finance Ltd was utilized by the assessee for construction of additional floor in the property owned by the assessee. The assessee furnished the entire details of interest paid on loan as well interest income earned on deposits. The assessee received interest income on FDRs kept with ICICI Bank @ 9.17% and State Bank of Patiala @ 10.05%. The assessee paid interest on its loan @ 13% on its borrowings. This action of the ld. AO was upheld by the ld. CIT(A). 6. As stated earlier, it is not in dispute that the borrowing made from ICICI Home Finance Ltd was meant to be utilized for construction of the additional floor in the property already owned by the assessee. It is not in dispute that the assessee could not ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was given on rent to a tenant and the business of the assessee stood transferred and continued in the shed located in the back portion of the said property. The assessee had also shown business income of Rs.5,250/- during the year. The assessee had also obtained a confirmation from the tenant HCL Services Limited which proves the fact that the shed which was already in possession of the assessee was never leased out to the tenant. The confirmation from tenant in this regard vide letter dated 12/07/2016 is enclosed at page 32 of the Paper Book. The lease agreement entered with the tenant also categorically proved that existing vacant storage space (shed) is only for the use of the Lessor and Lessee is not allowed to use it for any purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lutely no justifiable reasons for the Ld. AO to disallow the business loss entered thereon. Accordingly, we direct the Ld. AO to allow the business loss of Rs.9,29,941/- claimed for AY 2013-14. 8. Accordingly, grounds raised by the assessee for AY 2013-14 are allowed. 9. The only ground raised by the assessee for AY 2014-15 is challenging the disallowance of interest paid on loan taken from ICICI Home Finance Ltd. This is identical to ground No.1 disposed of by us in AY 2013-14, hence, decision rendered by us in AY 2013-14 shall apply mutatis mutandis for AY 2014-15 also, except with variance in figures. Accordingly, the ground raised by the assessee for AY 2014-15 is allowed. 10. The grounds raised by the assessee for AY 2015-16 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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