9911796707
TMI Blog2024 (3) TMI 1067X X X X Extracts X X X X X X X X Extracts X X X X ..... passed u/s. 143(3) of the Income Tax Act, 1961 [the Act] for the AY 2013-14. 2. Briefly stated the facts of the case are that the assessee-company is engaged in the business of Trading in General Hardware, filed its return of income for the AY 2013-14 on 28/11/2013 admitting a total income of Rs. 18,36,860/-. The return was processed u/s. 143(1) of the Act accepting the income returned. Thereafter, the case was selected for scrutiny under CASS and notice u/s. 143(2) was served on the assessee on 11/9/2014 by the ITO, Ward-3(1), Visakahaptnam and the same was duly served on the assessee on 16/9/2014. Subsequently, the case was transferred to the ITO, Ward-3(3), Visakhapatnam and accordingly the assessee was given a fresh opportunity u/s. 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. AO, the assessee preferred an appeal before the Ld. CIT(A)-NFAC. On appeal, the Ld. CIT(A)-NFAC partly allowed the appeal wherein the Ld. CIT(A)-NFAC sustained the disallowance of Rs. 76,60,803/- made by the Ld. AO being the expenditure under the head interest paid. Aggrieved by the order of the Ld. CIT(A)-NFAC, the assessee is in appeal before the Tribunal by raising the following grounds of appeal: "1. The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case. 2. The Ld. CIT(A) is not justified in sustaining the addition of Rs. 76,60,803/- made by the Assessing Officer towards disallowance of interest on loan from Bajaj Financial Services. 3. Any other grounds that may be urged at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord as well as the orders of the Ld. Revenue Authorities. The only issue involved in this appeal, whether the interest of Rs. 76,60,803/- incurred on borrowed funds utilized for making investment in shares of M/s. Dolphin Overseas Private Limited, Singapore is a proper expenditure allowable u/s. 57 or not? We have also carefully perused the citation quoted by the Ld. AR in the case of Sri Satyasai Properties and Investment P. Ltd vs. CIT (supra). The issue in the instant case is identical to the issue directly dealt with by the Hon'ble Calcutta High Court in the case of Sri Satyasai Properties and Investment P. Ltd vs. CIT (supra). The Held portion from the judgment of the Hon'ble Calcutta High Court (supra) is extracted herein below for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of earning income in the future periods. Further, the Ld. Revenue Authorities also did not bring on record that the investment was made by the assessee otherwise than for the purpose of making an income. Further, we observed that section 57(iii) is clear and has to be construed according to its natural meaning. It should not be given a narrowed meaning and the interpretation of section 57(iii) cannot be held to be conditional upon making or earning of the income. Therefore, considering the facts and circumstances of the case and also respectfully following the decision of the Hon'ble Kolkata High Court (supra), we are of the considered view that the assessee is eligible to claim deduction of interest expenditure incurred on borrowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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