JALARAM ENTERPRISES CO. P. LTD.,MUMBAI vs. ACIT CENT CIR. 3, MUMBAI

AadoSa / O R D E R महावीर स ुंह, न्याययक दस्य/ PER MAHAVIR SINGH, JM: This appeal of assessee is arising out of the order of Commissioner of Income Tax (Appeals)-47, Mumbai in Appeal No. CIT(A)-36/AP.10/14- 15 dated 28.06.2016. The Assessment was framed by the Asst. Commissioner of Income Tax-Circle 3, Mumbai (in short ACIT/ITO/ AO) for AY 2011-12 vide dated 29.03.2014, under section 143(3) of the Income-tax Act, 1961 (hereinafter ‘the Act’). The only issue in this appeal of assessee is against the order of 2. CIT(A) confirming the action of the AO in disallowing the claim of 2 | P a g e ITAs No.4988/MUM/2016 deduction under section 36(1)(iii) of the Act, amounting to ₹ 8,13,316/- on account of interest. For this, assessee has raised the following two grounds, which are revised grounds: - “(i) BECAUSE, Id. CIT(A) has erred in law and on facts in upholding the disallowance of ₹ 8,12,315/- under section 36(1)(iii) ignoring the fact that the appellant has not claimed deduction under section 36(1)(iii) of the Act, and that the total amount of ₹ 10,80,897.45 showing in Profit and loss account has been written back in computation of income.

1(ii) Because, the CIT(A) has erred in law and on facts in ignoring the fact the out of ₹ 7,73,734/-, ₹ 4,05,663/- and ₹ 2,01,477/- have already been allowed by her under section 24(b) and disallowance of ₹ 1,66,574 has been accepted in first appellate proceedings.”

We have heard the rival contentions and gone through the facts 3. and circumstances of the case. We noted that the assessee has claimed the interest expenses in the profit and loss account amounting to ₹ 8,13,316/- by debiting the same to the profit and loss account according to AO this interest is not for the purpose of business and this is in respect of capital borrowed for the purpose of advancing the funds for non- business purposes. Hence, he disallowed the interest claimed by assessee. Aggrieved, assessee preferred the appeal before CIT(A) who also confirmed on the same reasoning. Aggrieved, assessee came in appeal before us.