DEEPI ARORA,MUMBAI vs. ACIT CR 19(1), MUMBAI

The Ld CIT (A) erred in confirming the addition made by the AO to the extent of Rs. 37,092/-, under the head „income from other sources‟ being interest received although the actual interest accrued during the year is Rs. 5,312/- as declared by the appellant in her return.”

Briefly stated relevant facts of the case are that the assessee, who is an individual, is engaged in the business of sale of electricity generated by wind mills. Assessee filed the return of income declaring the total income of Rs. 1,08,64,192/-. Assessment was completed u/s 143(3) of the Act and the assessed income was determined at Rs. 1,14,58,170/-. In the assessment, AO made certain additions viz, (i) disallowance of Rs. 96,159/- u/s 14A of the Act; (ii) disallowance of Rs. 4,24,438/- u/s 48 of the Act, being interest on loan expenditure and (iii) addition of Rs. 72,562/- under the head „income from other sources‟. Aggrieved, assessee carried the matter in appeal before the first appellate authority.

During the proceedings before the first appellate authority, after considering the submissions of the assessee, CIT (A) restricted the addition to Rs. 37,092/- made on account of „income from other sources‟ and confirmed the disallowance of Rs. 4,24,438/- made u/s 48 of the Act. Again aggrieved with the said decision of the CIT (A), assessee is in further appeal before the Tribunal by raising the above mentioned grounds.

During the proceedings before us, at the outset, ld Counsel for the assessee submitted that this is the case where in the assessee took loan for investment in non-IPO (initial public offer) related shares. Assessee erroneously claimed the interest on the said loan as allowable expenditure. This issue is actually covered against the assessee vide the order of the Tribunal in the assessee‟s own case for the earlier assessment year as reported in 49 taxmann.com 567 (Mumbai – Trib.), dated 20th August, 2014. 5. We have heard both the parties and perused the orders of the Revenue Authorities as well as the cited decision of the Tribunal (supra) in the assessee‟s own case for the AY 2008-2009. After hearing both the parties and considering the fair submissions of the Ld Counsel for the assessee, we find the said order of the Tribunal is relevant for the proposition that the interest expenditure upto the period when the asset is first put to use is required to be capitalized and the interest pertaining to the subsequent period is allowable as revenue expenditure. Considering the same as well as respectfully following the said decision of the coordinate Bench in the assessee‟s own case on identical issue, we have no hesitation to come to a conclusion that the CIT (A) was justified in holding that the interest expenditure is not deductible against short term capital gains on the facts of this case. Accordingly, the Ground no.1 raised by the assessee is dismissed.

Ground no.2 is not pressed by the Ld Counsel for the assessee. Accordingly, after hearing the Ld DR, the same is dismissed as not pressed.

In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 14th March, 2016. (RAM LAL NEGI) ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक 14.3.2016 व.नन.स./ OKK , Sr. PS आदेश की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent. 2. 3. आमकय आमुक्त(अऩीर) / The CIT(A)- 4. आमकय आमुक्त / CIT 5. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai 6. गार्ड पाईर / Guard file. सत्मावऩत प्रनत ////