Disallowance of Interest not sustainable if nexus between income & expenses established

Harsh Nareshbhai Patel Vs ITO (ITAT Ahmedabad)

The Ahmedabad ITAT recently ruled in favor of the assessee, Harsh Nareshbhai Patel, allowing a deduction under Section 57 of the Income Tax Act, 1961. The appeal arose from the assessment year 2017-18, during which the Assessing Officer (AO) disallowed the deduction of ₹30,37,469 on the grounds of insufficient documentation to establish a clear nexus between the expenses claimed and the income earned. The AO had noted that key records, including bank statements and confirmations of interest payments, were not provided during scrutiny

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