Narayanan Balusamy Kumar vs. The Assistant Commissioner of Income Tax

Parties Involved

Facts Summary

Narayanan Balusamy Kumar, an individual and Director of Thangamayil Jewellery Limited, appealed against the order passed by the Commissioner of Income Tax (Appeals) for the assessment year 2017-18. The assessee claimed interest paid to LIC, ICICI Bank Ltd., and LIC-HFL as a deduction under section 57 of the Income Tax Act, 1961. The Assessing Officer denied the deduction, stating that the loans were availed for specific purposes and not for earning interest income. The ld. CIT(A) confirmed the disallowance. The assessee argued that there was a direct nexus between the loan borrowed and the loans given to Thangamayil Jewellery Limited, and that the purpose of the loan was irrelevant. The assessee cited a decision of the Mumbai Bench of the Tribunal to support his claim. The DR argued that there was no documentary evidence to support the assessee's claim. The Tribunal remanded the matter to the Assessing Officer for fresh examination, directing the assessee to file the required evidence.…

Legal Issues

• 1. Whether the ld. CIT(A) is justified in confirming the disallowance of ₹.40,57,125/- ignoring direct nexus between the loan borrowed and loan given in the facts and circumstances of the case.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

Similar Judgements

• Devinder Ajmani Vs. Assessing Officer, Ward-11(1)

  Delhi Bench benchAY 2020-21Allowed

• Ankur Chandulal Shah Vs. The Asst. Commissioner of Income Tax, Circle -19(1), Mumbai

  Mumbai Bench benchAY 2017-18Allowed

• Shri Mukesh Chhotelal Gupta vs. The DCIT, Cir.(1)(1) Ahmedabad

  Ahmedabad bench

• Deepak Batra Vs CIT(A)/NFAC, Delhi

• Vishal Balvantrai Agarwal vs. The Pr.CIT

  Ahmedabad bench

• M/s. Elite Agro Specialties v. The Income Tax Officer

  Cochin bench