Case Law Details
United Teleservices Ltd. Vs ACIT (ITAT Kolkata)
Conclusion: Disallowance on account of interest on office loan was confirmed as assessee had taken loan from Bank for office and claimed deduction in respect of the interest expenditure incurred on this loan thus, the presumption based on mixed funds could not be applied.
Held: Assessee had claimed interest expenditure of Rs.4,02,837/- for its office. AO disallowed it since this office was not utilized/put to use. CIT(A) confirmed the action of the AO. Assessee contended that it had its own fund to the tune of Rs.8,28,88,111/-and the loan amount was only to the tune of Rs. 1.3 cr. and, therefore, assessee possessed mixed fund which included its own fund in sufficient quantity. Therefore, according to him, presumption need to be drawn that its own funds were utilized for the purchase of office. It was held that assessee had shown in its books that the loan of Rs. 1.3 cr. had been taken from the Axis Bank for office and claimed deduction in respect of the interest expenditure incurred on this loan thus, the presumption based on mixed funds could not be applied.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal preferred by the assessee is against the order of Ld. CIT(A)-4, Kolkata dated 11.02.2020 for AY 2016-17.
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