SRI RISHI DAS,LUCKNOW vs. ASSTT. CIT-3, LUCKNOW-NEW

ITA 320/LKW/2023Status: DisposedITAT Lucknow20 August 2026AY 2016-1716 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's activity of advancing funds was not an adventure in the nature of trade and that the interest expenditure was allowable as a deduction under Section 57(iii) as it was incurred wholly and exclusively for the purpose of earning interest income.

What were the facts?

The assessee advanced funds to three companies from personal borrowings, earning interest income. The Assessing Officer treated this as an adventure in the nature of trade and disallowed interest expenses, assessing income under Profits & Gains of Business or Profession.

What were the issues?

Whether the interest income earned from advancing funds to related companies constitutes an adventure in the nature of trade, and whether the interest expenditure incurred on borrowings for such advances is deductible.

Which sections of the Income-tax Act were involved?

Section 28(ii)(a),Section 37(1),Section 57(iii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW “A” BENCH, U.P.

Before: HON’BLE SHRI KUL BHARAT & SHRI G.D. PADMAHSHALI

For Appellant: Mr Saurav Agarwal [‘Ld. AR’]
For Respondent: Mr Sudhakar Shukla [‘Ld. DR’]
Pronounced: 20/08/2026

PER G. D. PADMAHSHALI; The present appeal is filed u/s 253(1)(a) of the Income Tax Act

[‘the Act’] by the assessee challenges the DIN & Order No.

ITBA/NFAC/S/250/2023- 24/1055142819(1) dt. 16/08/2023

passed by the National Faceless Appeal Centre, Delhi [‘Ld.

NFAC’] u/s 250 of the Act for assessment year 2016-17 [‘AY’]

which in turn arisen out of order of assessment dt. 17/12/2018

passed u/s 143(3) of the Act by the Asstt. Commissioner of Income Tax-3, Lucknow [‘Ld. AO’].

ITAT-Lucknow Rishi Das Vs ACIT-3, Lucknow ITA No. 320/LKW/2023 AY: 2016-17

2.

The facts of the present case tersely stated are that; 2.1 the assess

The order continues below.

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