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TMI Blog2023 (9) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... expense of Rs. 243,521 without appreciating that all these loans were old loans carried forward from the earlier year that were utilized for the purpose of business, and interest was allowed in earlier year also. 2. Without prejudice to above, on the facts, and in circumstances of the case, and in law, learned Commissioner of Income-tax (Appeal) and the Assessing Officer erred in not appreciating that overdraft was raised in the business as some of the funds were employed to buy industrial units which were let out; and thus, interest if not allowable as business expense was allowed against income from house property. 3. On the facts, and in circumstances of the case, and in law, learned Commissioner of Income-tax (Appeal) erred in uphol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal income of Rs. 20,33,340/- and passed the order u/s 143(3) of the Act dated 27.03.2015. 3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A). Whereas the CIT(A) confirmed the action of the AO and dismissed the assessee appeal. On further appeal, the Hon'ble Tribunal in ITA No. 6273/Mum/2017 dated 15.02.2019 has restored the disputed issues to the file of the Assessing officer. Accordingly, now the AO has issued notice u/s 143(2) and 142(1) of the Act and the observations of the AO are that the assessee has not explained the sources of investments and the interest bearing funds are used for acquisition of property and therefore the AO is of the opinion that the assessee is not entitled for claim of deduction and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7/- and the assessee has nearly obliterated his fixed assets and investments. Therefore it is clear that the assessee is finding his activities through interest bearing funds only. It is only on account of massive loans taken from the bank and others for the purpose of acquiring properties that the assessee has been forced to pay bank interests, other interest and bank charges on the same. Further the assessee had not acquired any business asset also and the industrial unit acquired by the assessee jointly with his wife have been merely let out. The income from the let out property is claimed as income from House Property only. 12 In view of the foregoing paragraph out of interest disallowance of Rs. 6,48,422/- and Rs. 2,43,251/- paid for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal with the CIT(A), whereas the CIT(A) considered the grounds of appeal, submissions of the assessee and findings of the AO and has granted partial relief and partly allowed the assessee appeal. Aggrieved by the CIT(A)order, the assessee has filed an appeal before the Hon'ble Tribunal challenging the sustainment of disallowance of interest expenses of Rs. 2,43,521/- and disallowance of interest paid to LIC Ltd and HDFC Ltd Rs. 37,965/-. 5. At the time of hearing, the Ld. AR submitted that CIT(A) has over looked the facts that the interest on unsecured loans disallowed by the AO, is in respect loans obtained in earlier years and interest was paid subject to TDS. Further the assessee has paid interest on housing loans obtained from LIC L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d debited in the profit and loss account. Further the AO has not disputed on the genuineness of loans and the loan funds were utilized wholly and exclusively for the purpose of business. The Ld.AR emphasized that the own funds are more than the loan funds and relied on the judicial decisions. Considering the facts, circumstances and the information filed in the course of hearing find that there is no dispute with respect to the interest paid to the unsecured loan creditors on the opening balances and further the revenue has been accepting the interest claim in earlier years. Accordingly, the order of the CIT(A) on this disputed issue is set aside and direct the Assessing officer to delete the disallowance of interest on unsecured loans of R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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