DEVENDRA KUMAR GUPTA,KOLKATA vs. I.T.O.,WARD-29(1), KOLKATA

The assessee’s sole substantive grievance raised in the instant appeal seeks to reverse both the lower authorities’ action disallowing interest claim of ₹8,56,245/- during the assessment as well affirmed the lower appellate proceedings. The CIT(A)’s detailed discussion to this effect reads as under:- “3. Observation and Decision:

Devendra KR. Gupta Vs. ITO Wd-29(1), Kol. Page 2 Ground of appeal no. 1: In this assessee, in the intimation u/s. 143(1) of the Income Tax Act, 1961 loss of Rs.8,50,325/- under the head “income from other sources” was not allowed. During the course of appeal proceedings, the appellant stated that the loss had accrued mainly on account of payment of interest of Rs.8,04,000/- in respect of unsecured loans taken from various family members of the appellant. The appellant is having a business under the name and style of M/s Dev pack, which is self-owned by him. However, the loans taken against which the interest of Rs.8,04,000/- was paid was reflected in the personal balance sheet of the appellant and was not reflected in the balance sheet and profit and loss account of the business concern named as M/s Dev pack. Hence, the loans so taken have been shown by the appellant himself in his personal capacity and are not reflected in the books of account of M/s Dev pack and Hence the interest thereon have not been shown as an expense while calculating the income from business and profession. This interest on loans, as have been taken in the personal capacity, have been thus set off against incomes earned under the head “income from other sources”. While computing the income from other sources, it can lead to income only and there cannot be a net loss while calculating income from other sources. In view of this, the net loss shown by the appellant under the head “income from other sources” cannot be set off against other incomes earned by the appellant. Hence, the plea of the appellant that the loss arising under the head “Income from Other Sources” be allowed to be set off from the other sources of income is not tenable and the plea of the appellant cannot be accepted. In view of this, the appeal is not allowed.”