Case Law Details
Ankit Ashok Savla Vs ITO (ITAT Ahmedabad)
Introduction: In the landmark case of Ankit Ashok Savla Vs ITO, ITAT Ahmedabad clarified the non-disallowance of interest expenses incurred for earning income from loans and advances under Section 57 of the Income Tax Act. This decision shines a light on how these expenses are treated in the computation of taxable income, establishing an important precedent.
Analysis: The appellant, Ankit Ashok Savla, filed an appeal against the order of the CIT(Appeals) which confirmed the disallowance of Interest Expenditure of Rs.9,15,074/- under section 57 of the Act. The appellant argued that the Assessing Officer and the CIT(A) failed to properly consider that the interest expenses were incurred for the purpose of earning income from various parties, advances, and partnership firms, and thus should not be disallowed.
ITAT Ahmedabad, after considering the arguments presented by both parties, held that the Assessing Officer and the CIT(A) were unjustified in their disallowance of interest expenses. The tribunal held that the Assessing Officer cannot dictate the appellant about the loans and advances given to other parties and the interest charged thereon, especially given the appellant’s status as a partner in a partnership firm.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
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