ALNESH AKIL SOMJI,PUNE V. ASSISTANT COMMISSIONER OF INCOME TAX, PUNE

ITA 35/PUN/2025

AI Insights

The case involves appeals by the assessee, Alnesh Mohamadakil Somji, against the orders of the CIT(A), Pune, which related to the assessment years 2018-19 and 2019-20. The primary issues in the appeals included the disallowance of interest expenditure on borrowed capital for self-occupied house property and the disallowance of interest expenditure claimed under 'Income from Other Sources'. The Tribunal noted that the Assessing Officer and CIT(A) had not adequately considered the assessee's submissions and the legal provisions under the Income Tax Act, particularly sections 57(iii) and 36(1)(iii). The Tribunal referenced several precedents and legal principles to support its decision to restore the matters to the Assessing Officer for a detailed examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669378 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Other Referred Cases: PCIT vs. JSW Steel Ltd., CIT vs. Darashaw & Co. Pvt. Ltd., Jitendra Prakashchandra Shah vs. ACIT, Akash Goyal vs. ACIT, Shri Girishbhai Vadilal Shah vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMOL KHAIRNAR
• Assessee Lawyers: NITIN RANDER
• Keywords: Set aside; Business income; Revised return; Question of law; Corroborative evidences; Capital expenditure; Search and seizure; Earning of tax free income; Rule 8D; Bogus
• Section: 143(3); 142(1); 132; 153A; 139; 14A; 37(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS ASTHA CHANDRA, JUDICIAL MEMBER ITA Nos.34 & 35/PUN/2025 Assessment Years : 2018-19 & 2019-20 Alnesh Mohamadakil Somji 1st Floor, A Building, Kanhya Classic, Narangi Baug Road, Pune – 411001 Vs. ACIT, Pune PAN: AXLPS5505N (Appellant) (Respondent) Assessee by : Shri Nitin Rander Department by : Shri Amol Khairnar CIT-DR Date of hearing : 19-06-2025 Date of pronouncement : 27-06-2025 O R D E R PER R.K. PANDA, V.P: The above 2 appeals filed by the assessee are directed against the common order dated 07.11.2024 of the Ld. CIT(A), Pune -11 relating to assessment years 2018-19 and 2019-20 respectively. For the sake of convenience, these appeals were heard together and are being disposed of by this common order. ITA No.34/PUN/2025 (A.Y. 2018-19) 2. Facts of the case, in brief, are that the assessee is an individual and partner in various firms of Gagan group of cases. He filed his original return of income u/s 139(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on 2 ITA Nos.34 & 35/PUN/2025 31.10.2018 declaring total income of Rs.Nil (for assessment year 2019-20 at Rs.57,29,190/-). The assessee filed a revised return on 30.03.2019 declaring total income of Rs.Nil for assessment year 2018-19 (for assessment year 2019-20 revised return of income at Rs.49,44,190/-). A search and seizure action u/s 132 of the Act was conducted in the case of the assessee on 16.01.2019. In response to the notice u/s 153A of the Act issued on 09.09.2019 the assessee filed his return of income on 30.11.2020 declaring total income of Rs.Nil. The Assessing Officer issued and served statutory notices u/s 143(2) and 142(1) of the Act in response to which the AR of the assessee filed the requisite details from time to time. 3. During the course of assessment proceedings the Assessing Officer noted that the assessee, in the original return of income filed u/s 139(1) of the Act, has shown income from self occupied house property at Rs.Nil. However, in the return filed in response to the notice u/s 153A of the Act the assessee has claimed deduction u/s 24(b) of the Act on account of interest paid on housing loan amounting to Rs.2 lakh resulting in loss of Rs.2 lakh which has been set off against the other income of the previous year. He, therefore, asked the assessee to furnish evidence in respect of housing loan availed, copy of the loan account statement and the certificate from the bank regarding the payment of interest and principal amount. The Assessing Officer also asked the assessee to explain as to why the claim of deduction should not be disallowed as it was not made in the original return filed u/s 139(1) of the Act. 3 ITA Nos.34 & 35/PUN/2025 4. However, the assessee failed to furnish any supporting evidence to prove the payment of interest on housing loan taken for the purpose of purchase of self occupied house property. Without prejudice to the above, the Assessing Officer held the assessee’s claim is also not admissible as the assessee cannot make any additional claim in the revised return filed in response to the notice u/s 153A of the Act which was not made in the return filed u/s 139(1) of the Act. Further, the assessee in his reply filed on 21.04.2021 has submitted that in the revised computation of income the assessee has not claimed the set off and the loss has been carried forward to the succeeding years. In view of this the Assessing Officer disallowed the claim of deduction of Rs.2 lakh on account of interest paid on self occupied house property. 5. The Assessing Officer further noted that in the revised computation of income the assessee has shown income from other sources at Rs.4,95,77,687/- which includes the income of Rs.3,44,55,942/- received from various firms in which the assessee has made investments as loan. He noted that the assessee has also shown receipt of interest on FDR, Saving bank accounts, IT refunds and commission income amounting to Rs.1,51,21,745/-. Against these incomes, the assessee has claimed deduction on account of interest paid on borrowed funds amounting to Rs.7,82,44,272/-. Thus, the assessee has shown net loss of Rs.2,86,66,585/- under the head ‘Income from other sources’ and set it off against the ‘Income from business and profession’ resulting in total income of Rs.Nil. He further noted that the assessee has shown exempt income of Rs.1,13,777/- being 4 ITA Nos.34 & 35/PUN/2025 share of profit received from the firms but no disallowance was made u/s 14A read with Rule 8D of the I T Rules. He, therefore, asked the assessee to furnish the details of interest income received and interest paid to various parties. 6. The assessee in response to the same furnished the details of interest received and interest paid along with ledger copies of the relevant accounts. From the details so furnished by the assessee, the Assessing Officer noted that the amount of interest received is less than the interest paid meaning thereby that the assessee has diverted the borrowed funds to other concerns from which no interest has been received. He, therefore, asked the assessee to show cause as to why the claim of interest expenditure should not be restricted to the amount of interest received as was done by the assessee in the preceding years. The assessee filed elaborate details justifying his claim. However, the Assessing Officer was not satisfied with the arguments advanced by the assessee and disallowed an amount of Rs.1,43,29,828/- by observing as under: “4.4 The submission made by the assessee has been carefully considered and not found acceptable. The assessee has claimed expense on account of interest paid on the funds borrowed which was partly invested in other firms from which exempt income was received or no income was received. It is also a fact that out of such investments, the assessee has also shown interest income at Rs.3,51,47,867/- in the final computation of income. But, the facts remain that the assessee has also not been able to explain how the interest bearing funds were utilized. 4.5 It is seen that for the preceding assessment years, the assessee has restricted the claim of interest paid to the interest income earned and suo motu disallowed the excess interest paid. In the preceding assessment years, the assessee has consistently been showing interest received under the head \"Income from Other Sources\", but in the written submission made, the assessee has claimed the amount of interest received from M/s Gagan I Land Township Pvt. Ltd. under the \"Income from Business\". The claim of the assessee is rejected as interest received from a company in which the assessee is a share holder does not fall within the definition of Business Income u/s 28(v) of the IT Act. 5 ITA Nos.34 & 35/PUN/2025 4.6 As per the provisions of section 57(iii) of the IT Act, deduction of interest paid shall be allowed as deduction only if it is laid out wholly and exclusively for the purpose of making or earning such income. As is evident from the above table, the assessee has received interest @21% on the amount of loans given to M/s Gagan I Land Township Pvt. Ltd. and M/s Gagan Lifespace and also paid interest @ 21% to M/s Gagan Ace Developers and M/s Gagan Lifespace LLP. If the rate of interest is the same and the entire borrowed fund was utilized for giving interest bearing loans, the amount of interest received and paid should have been equal. But, as can be seen, the assessee has received interest of Rs.3,51,47,867/- and paid interest of Rs.4,94,77,695/- meaning thereby that the entire borrowed fund was not lent out for the purpose of making or earning income. 4.7 In view of the above discussion, the interest paid and claimed as deduction is restricted to Rs.3,51,47,867/- which is the amount of interest received instead of Rs.4,94,77,695/- and the balance amount of Rs.1,43,29,828/- is disallowed.” 7. The Assessing Officer accordingly determined the total income of the assessee at Rs.1,43,42,433/-. 8. In appeal the Ld. CIT(A) dismissed both the grounds. So far as the disallowance of interest on borrowed capital for self occupied house property is concerned, he dismissed the same by observing as under: “8. I have considered the facts of the case and submissions made by the appellant. In the present case, the original return of income for AY 2018-19 was filed on 31.10.2018 and the search was conducted on 16.01.2019. In this manner, the assessment for AY 2018-19 falls in the category of 'abated assessment‟. The Hon'ble Bombay High Court in the case of JSW Steel Ltd. (supra) has observed that where an assessee filed an original return of income u/s. 139 and while assessment was pending, assessee again in response to notice u/s 153A filed another return by making new claim, since the assessment got abated, it is open for the assessee to lodge a new claim in a proceeding u/s. 153A of the Act which was not claimed in his regular return of income and the AO was not justified in rejecting such claim of the assessee. 9. Thus, the ratio laid down by the Hon'ble Bombay High Court in the case of JSW Steel Ltd. (supra) is squarely applicable to the facts of the present case because the assessment for AY 2018-19 falls in the category of abated assessment. 10. It is however seen from the assessment order, that the claim of deduction of Rs.2,00,000/- on account of interest paid on housing loan for self-occupied 6 ITA Nos.34 & 35/PUN/2025 property was rejected by the AO on technical ground as well as for the reasons that the assessee failed to furnish any supporting evidence to prove the payment of interest on the housing loan taken for self-occupied property. Although the legal contention of the appellant that he could have made this fresh claim in the return filed u/s. 153A has been accepted by me, however, it is seen that the appellant has not filed any supporting evidence to prove the payment of interest on the housing loan taken for self-occupied property. In the absence of any supporting evidence, the claim of deduction of Rs.2,00,000/- cannot be allowed. Considering the totality of facts of the case, the disallowance of Rs.2,00,000/- made by the AO is upheld. The ground no. 1 raised by the appellant is DISMISSED.” 9. So far as the disallowance of Rs.1,41,34,845/- is concerned, the Ld. CIT(A) upheld the action of the Assessing Officer by observing as under: “14. It can be seen from the details of various receipts as tabulated by the appellant in the submission filed before the AO which have been reproduced at page 9 and 10 of the assessment order that the assessee has received interest from firms, interest on income tax refund and interest from banks. Thus, the total interest received by the appellant is Rs.3,53,61,050/-. Besides interest, the appellant has also received commission from various entities and total of such commission comes to Rs.1,41,16,645/-. Against these receipts, the appellant has claimed deduction towards the interest amounting to Rs.4,94,72,070/-. It is further seen that the appellant has restricted the claim of interest to the extent of total receipts under the head 'income from other sources' as reduced by bank charges of Rs.5,625/-. These facts clearly suggests that the appellant never claimed interest deduction on proportionate basis as claimed during the appellate proceedings. 15. It is further seen that appellant is claiming that whole of the amount given as loan to Gagan I Land Township Pvt. Ltd. and capital in three other firms was out of capital withdrawn from the firm M/s. Gagan Ace Developers on which interest was paid. This claim cannot be accepted unless the appellant substantiates the same. Moreover, since the appellant has not filed his balance sheet as on 31.03.2018, it is not possible to ascertain various assets and liabilities of the appellant as on 31.03.2018. Accordingly, it cannot be accepted that the only source is capital withdrawn from M/s. Gagan Ace Developers. Thus, theory of proportionate claim of interest expense in proportion to total loan and capital in four firms vis-à-vis the debit balance in capital account of M/s. Gagan Ace Developers cannot be accepted. 16. It is further seen that the deduction u/s. 57(iii) of the Act is allowed only for those expenses which are made wholly and exclusively for the purpose of earning such income. It is seen from the assessment order that during the assessment proceedings, the AO had specifically asked the assessee to explain how the interest-bearing funds were utilized. Same details were not filed by the appellant. Moreover, the appellant has not substantiated that the sole purpose of capital withdrawn was earning of interest income and commission income. The onus of 7 ITA Nos.34 & 35/PUN/2025 substantiating that the purpose of capital withdrawn was for earning income from other sources is on the appellant which has not been discharged by him. 17. Further, it is not understood as to how the appellant incurred expenses for earning interest on income tax refund/interest from banks. Furthermore, the appellant has not made any effort to demonstrate as to how the interest-bearing loan were used for earning commission income of Rs.1,41,34,875/-. 18. The above discussion clearly suggests that the appellant has failed to demonstrate that the interest-bearing loans were used for earning commission income and interest on income tax refund/bank interest. In the absence of same, the deduction of any portion of interest paid on capital withdrawn from M/s. Gagan Ace Developers cannot be allowed against these commission receipts and interest on income tax refund/bank interest. In view of these facts, the action of the AO in restricting the claim of deduction of interest payment to the extent of interest earned from firms is upheld. The disallowance of Rs.1,43,29,828/- made by the AO is therefore upheld. The ground no. 2 stands DISMISSED.” 10. Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds: 1. On the facts and circumstances of the case the learned Commissioner of Income Tax (Appeals) has erred in denying the appellant the carry forward of House Property loss amounting to Rs.2,00,000/- without appreciating the facts of the case in the proper perspectives. Therefore, the appellant requests your honour to allow the loss under House Property. 2. On the facts and circumstances of the case the learned Commissioner of Income Tax (Appeals) has erred in restricting the allowability of interest expenditure only to the extent of Rs.3,51,47,867/- and disallowing the balance interest of Rs.1,43,29,828/- without appreciating the facts of the case in the proper perspectives. 3. On the facts and circumstances of the case, the Learned Assessing Officer and learned CIT(A) have erred in not appreciating that the interest expense and interest and commission income ought to have been chargeable under the business head instead of income from other sources. 4. The appellant reserve the right to amend, alter or add to the ground of appeal. 11. The first issue raised by the assessee in the grounds of appeal relates to the denial of Rs.2 lakh being interest paid on borrowed capital for house property. 8 ITA Nos.34 & 35/PUN/2025 12. After hearing both sides, we find the Assessing Officer disallowed the same on the ground that the assessee did not furnish the details such as proof of payment of interest for housing loan taken for purchase of self occupied house property, copy of loan account statement and the certificate from the bank regarding the payment of interest and principal. Further, the Assessing Officer also held that the assessee cannot make a new claim in the return filed in response to notice u/s 153A of the Act. We find the Ld. CIT(A) although held that the assessee can make a new claim in proceedings u/s 153A which was not claimed in his regular return of income since the assessee filed original return of income u/s 139 of the Act and while the assessment was pending the assessee again in response to notice u/s 153A filed another return making a new claim, however, rejected the same in absence of documentary evidence filed before him. We find the Revenue is not in appeal against the finding of the Ld. CIT(A) that the assessee can make a new claim in the abated assessment in light of the decision of the Hon’ble Bombay High Court in the case of PCIT vs. JSW Steel Ltd. reported in 270 Taxman 201 (Bom). It is the prayer of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate his case by filing the requisite details before the Assessing Officer. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate his claim of interest expenditure of Rs.2 lakh on account of borrowed capital for self occupied house property and decide the issue 9 ITA Nos.34 & 35/PUN/2025 as per fact and law. We hold and direct accordingly. The first issue raised by the assessee is accordingly allowed for statistical purposes. 13. The second issue raised by the assessee in the grounds of appeal relates to the order of the Ld. CIT(A) in confirming the disallowance of interest of Rs.1,43,29,828/-. 14. The Ld. Counsel for the assessee submitted that the incurring of interest expenditure is not disputed by the Assessing Officer since he has partly allowed the same. However, he has disallowed an amount of Rs.1,43,29,828/- on the ground that the assessee has claimed expenses on account of interest paid on the funds which were partly invested in other firms from which the exempt income was received or no income was received. It is also his observation that in the past years the assessee has restricted the claim of interest expenses to the extent of interest income earned. He submitted that as per the provisions of section 57(iii) of the Act for allowing the claim of expenditure only if it is laid out wholly and exclusively for the purpose of making or earning such income. It is the purpose of the expenditure that is relevant in determining the applicability of section 57(iii) of the Act and that purpose must be fulfilled in order to qualify the expenditure for deduction. It does not say that the expenditure was deductible only if any income is made or earned. 10 ITA Nos.34 & 35/PUN/2025 15. Referring to the decision of the Hon’ble Bombay High Court in the case of CIT vs. Darashaw & Co. Pvt. Ltd. 2014 (5) TMI 940 – Bombay High Court vide ITA Nos.2627 & 2628 of 2011 order dated 07.05.2014 and various other decisions as per the case law compilation, he submitted that the claim of the assessee should be allowed. 16. In his alternate contention, referring to the decision of the Ahmedabad Bench of the Tribunal in the case of Jitendra Prakashchandra Shah vs. ACIT 2025 (5) TMI 9 – ITAT Ahmedabad vide ITA No.1083/Ahd/2024, order dated 24.01.2025, he submitted that the deduction u/s 36(1)(iii) of the Act may be allowed. 17. The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A). 18. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case disallowed an amount of Rs.1,43,29,828/- out of interest expenditure of Rs.4,94,77,695/- claimed by the assessee on the ground that the assessee has received interest income of Rs.3,51,47,867/- only and that the assessee might have diverted the interest bearing funds for investment in partnership firms whose income is exempt or from where 11 ITA Nos.34 & 35/PUN/2025 no income is received since the rate of interest received and interest paid is same. The relevant observations of the Assessing Officer for disallowance of the said amount has already been reproduced in the preceding paragraphs. We find the Ld. CIT(A) confirmed the action of the Assessing Officer, the reasons of which have also been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that the incurring of expenditure towards interest is not doubted by the Assessing Officer since he has partly allowed the same but has restricted the expenditure to the extent of income received on the ground that the assessee has received and paid the interest at the same rate and therefore, the interest expenditure cannot exceed the interest income and that the assessee might have transferred the interest bearing funds for investment in the partnership firms the income of which is exempt or has made investment on which no income has been received. It is an admitted fact that the assessee in the instant case has claimed interest expenditure of Rs.4,94,72,070/- out of interest income on loan advanced at Rs.3,51,47,867/-. It is also an admitted fact that out of total interest paid of Rs.7,78,58,122/- to Gagan Ace Developers the assessee has restricted the same to Rs.4,89,96,119/-. It is also an admitted fact that the Assessing Officer in the instant case has not disputed the interest expenditure payment and has partly allowed the same meaning thereby that the borrowed amount has been partly given for interest purpose and partly on which no interest income has been received or has been invested in certain firms the income of which is exempt from tax. It is the submission of the Ld. Counsel for the assessee that merely because the assessee has not received any interest income from certain firms, the interest expenditure 12 ITA Nos.34 & 35/PUN/2025 cannot be disallowed. It is also his submission that merely because the assessee in the preceding years has restricted the interest expenditure to the extent of interest income, the same cannot be followed during this year because principles of res judicata does not apply to income tax proceedings. Further, a mistake done by the assessee in the past cannot be perpetuated. 19. We find somewhat an identical issue had come up before the Agra Bench of the Tribunal in the case of Akash Goyal vs. ACIT vide ITA No.234/Agra/2018, for assessment year 2015-16, order dated 04.11.2019 where the Tribunal after considering the various decisions including the decision of the Hon'ble Supreme Court in the case of CIT vs. Rajendra Prasad Moody (1978) 115 ITR 519 (SC) and various other decisions allowed the claim of the assessee by observing as under: “7. Heard. It is undisputed fact that the appellant assessee has received loans from third parties and Financial Institutions and advanced the same to the related parties either at equal interest rates or lower rates. The ld. CIT(A) has mentioned that the conditions for allowability under section 57(iii) is that whether the said expense was expended or laid down for the purpose of making or earning income against which it was claimed as deduction, and since the loans were given to the sister concerns either at either equal rates or less than the rate at which funds were borrowed by the assessee and therefore, there can be no question of earning any positive income out of the loan transactions entered into by the appellant assessee. The Ld. CIT(A) has further observed that for allowability of deduction under section 57(iii) it is essential that the said expense should be laid out or expended wholly and exclusively for the purpose of making or earning income against which it is claimed as deduction where in the present case the borrowed funds have been given to four private limited companies, in all of which he and/or his family members are directors or major stakeholders and that no purpose of giving the loans to the four companies has been specified by the appellant either before the authorities below or during the present proceedings. However, on an appreciation of the fact, it can be fairly concluded that the funding was made to the four related family concerns/companies on interest by the assessee so as to allow aforesaid four companies to conduct their respective business activities. Meaning thereby that the interest expenses, in question incurred by the appellant were expended wholly and exclusively for the purpose of earning interest income. 13 ITA Nos.34 & 35/PUN/2025 8. From the records it is evident that the complete details of interest paid and interest received were reproduced before the AO and such details have already been mentioned by the assessee in paper book. There are a few instances of payment of comparatively higher interest than what the assessee received. However, the assessee himself has disallowed the excess payment of such amount of interest on those borrowed funds before debiting its legitimate claim of expenditure u/s 57(iii) of the act which has not been not been appreciated in positive spirit by the authorities below according to us. Thus, we conclude that the assessee has not advanced loan to parties at lower rate with an intention to incur losses as held by the ld. CIT(A) to benefit the related four family companies. We further find that the Learned A.O. while passing the order u/s 143(3) has neither considered the details of interest paid and interest received provided by the assessee and nor established any nexus between the amount of interest paid and the amount of interest received on such advanced and borrowed funds to the sister concerns particularly the funds advanced out of none of the four parties disputed and concluded that the assessee has advanced loans to various parties at low rate or equal rate of interest as the interest expenditure is higher than the interest income. In view of that matter, the contention of the assessing officer is not maintainable as it is not based on correct facts and the Ld. CIT(A) was not justified in confirming the finding of the AO without ascertaining all the facts of the case. 9. The assessee contended that it has though advanced money to the parties on interest out of housing loan raised from India Bulls Housing Finance Ltd Pvt. Ltd. which is related concern of the assessee and such advances have been made out of necessity by the assessee. It is admitted fact that nowhere, AO had pointed out that the assessee had utilized the loan amount for its personal use or claimed bogus expenditure in the garb of interest expenses. 10. We are of the view that it is not necessary that the expenditure incurred must have been obligatory; it is enough to show that the money was expended not necessary with a view to an immediate benefit to the assessee but voluntarily and on the ground of necessity and in order indirectly to facilitate the making or earning of the income. (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning such income (income chargeable under the head \"income from other sources'). This means section 57(iii) provides for deduction only of expenditure incurred wholly and exclusively 'for the purpose of making or earning such income\". In order that expenditure may be admissible under section 57(iii), if it is proved that the primary motive of incurring such interest expenses is directly to earn income under the head \"income from other sources\". 11. The natural construction of the language of section 57(iii) of the Act, irresistibly leads to the conclusions that to bring a case within purview the section, it is not necessary that any income should in fact have been earned as a result of the expenditure. What section 57(iii) requires is that the expenditure must be laid out or expended wholly and exclusively for the purpose of making or earning income. The section does not require that this purpose must be fulfilled in order to qualify, the expenditure for deduction. It does not say that the expenditure shall be 14 ITA Nos.34 & 35/PUN/2025 deductible only if any income is made or earned. Similar view is held in the cases of “CIT vs. Rajendra Prasad Moody”, (1978), Taxation 51 (3)-52, 115 ITR 519 (SC); CIT vs. Murli Manohar (1998) IX SITC 673 (All); CIT vs. Rampur Tirnber & Turney Co. Ltd. (1981) 129 ITR 58 (All.) 12. We have noted that the assessee had borrowed fund and invested the same for giving loan to the sister concerns from which it could earn interest income. The assessee had invested the amount by giving loan to the related concerns on which the assessee earned interest income in the earlier years. However, in the earlier years on the said loan no such addition was made by the AO. The Ld. A.R. has contended that earning income from the expenditure incurred is not a condition precedent for allowing the deduction under section 57(iii) of the Act. It is only for the purpose of making or earning of income which is required for allowing the deduction under section 57(iii) and not the actual income earned by the assessee. He relied upon the decision of \"CIT vs. Rajendra Prasad Moody”, (Supra) and and “ACIT Vs. Sanjeev Agrawal” ITAT Delhi Bench, ITA No. 3418/Del/2011 (Asst Year 2006-07). 13. In the present case also the assessee had provided to the assessing officer with the bank statements in which it is clearly visible that the funds raised from the unsecured loan taken from various parties is utilized for lending money to various parties. It means that the interest paid on unsecured loans is expended wholly and exclusively for earning the interest income from loans and advances. In addition to that the assessee has advanced money to its sister concern at rate of interest either equal or if less than he has not claimed the excess interest paid in expenditure so claimed u/s 57(iii) of the Act for the purpose of earning the income from the investment in the form of interest income which will be assessed under the head \"Income from other sources\" in the year when it is earned. It is immaterial whether the assessee has made profit out of such expenditure or not. For claiming deduction u/s 57(iii) of the income tax act it would be sufficient to prove that there is nexus between the income earned and amount expended. In view of that matter, all the requirements for claiming deduction u/s 57(iii) of the income tax act, 1961 are fulfilled and therefore assessee‟s claim of interest of Rs.49,38,149/- laid out “wholly and exclusively” for the purpose of earning interest shown under the head “Income from Other Sources” can be legally allowed u/s 57(iii) of the Act. 14. The Ld. CIT(A) while over ruling the judgement of Commissioner of Income Tax vs Smt. Swapna Roy (supra), has over stretched the interpretation of the condition precedent to avail the benefit of s. 57(iii) of the Act viz. the investment must be proper and justified to be satisfied. In paragraph no. 68 of its order, after referring-to and relying upon the judgment of the apex court in the case of CIT vs Rajendra Prasad Moody (supra), Hon‟ble Allahabad High Court has concluded that “proper investment means correct investment with intention to earn profit but their lordships have nowhere held positive income. Without prejudice to the above, the ld. CIT has neither verified nor commented to establish nexus between the funds borrowed and advanced for claim of such interest expenses before arriving at such conclusions. The finding of CIT(A) are not supported by corroborative factual evidence in arriving at the conclusion about the intention of 15 ITA Nos.34 & 35/PUN/2025 the assessee whether his intention was to earn profit or losses and further the department has accepted such a practice adopted by assessee in the past assessment years. Under the circumstances, the intention to earn interest is disputed by either of the subordinate authorities or adversely commented by the ld. CIT (A) or controverted by the ld. DR and therefore, such interest expenditure, deductible under section 57(iii) can be allowed even if it is not claimed in full by the assessee in the peculiar facts of the case at hand. 15. In the above view, considering the factual matrix of the case and legal precedents, we accept the grievance of the assessee justified. Accordingly, we allow the claim of Rs. 49,38,149/- u/s 57(iii) of the Act, as legally justified. Thus, the ground of appeal is allowed.” 20. We find the Hon’ble Bombay High Court in the case of CIT vs. Darashaw & Co. Pvt. Ltd. (supra) has observed as under: “6. With the assistance of the teamed senior counsel appearing for both parties, we have perused the memo of appeal and annexures thereto including the impugned order. In relation to ground Nos 2 and 3, the Income Tax Appellate Tribunal held that they are interconnected. The Tribunal noted the facts in paragraph 8. The facts are undisputed. It is not the case of the revenue that the borrowings and which have been invested in the MSRDC Bonds is not a liability. The dispute is also not raised about the fact that there is interest which is payable on these borrowings. The only question raised is that for the purposes of Section 57(iii), the bonds being disposed of the deduction as claimed was not allowable. The deduction was allowable so long as the bonds and shares were held for their eventual benefit. The benefit was that the bonds would be redeemed together with interest. The Tribunal noted these contentions and found that there is no merit in the revenue's stand. The Tribunal referred to the judgment cited by Mr Mistry before us 7. We must, for the purpose of appreciation of the contentions refer to two provisions which have been brought to our notice by the learned senior counsel. Mr Gupta would rely on Section 36 as also Section 57. Section 36 insofar as it is relevant, states that the deductions provided in the clauses following sub-section (1) shall be allowed in respect of matters dealt with therein in computing the income referred to in Section 28. The learned senior counsel appearing for the revenue submits that Clause (i) in this subsection provides for the amount of interest paid in respect of capital borrowed for the purpose of business or profession. 8. The learned senior counsel then relied on section 57 of the said Act and would urge that the deductions therein referred to the income chargeable under the head \"income from other sources. That income shall be computed after deductions are made and one of the deductions is allowed in respect of an expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning such income. 16 ITA Nos.34 & 35/PUN/2025 9. In the first decision cited before us by Mr. Mistry, the Hon'ble Supreme Court dealt with a case of the assesses who were brothers. They borrowed moneys for the purpose of making investment in shares of certain companies and during the assessment year 1965 1966 for which the relevant accounting year ended on 10th April 1965. Each of the two assessees paid interest on the moneys borrowed but did not receive any dividend on the shares purchased with those moneys. Each of the assessee made a claim of dividend on the borrowed money but this claim was negatived by the Income Tax Officer and equally in appeal on the ground that during the relevant assessment year the shares did not yield any dividend and therefore, interest paid on the borrowed moneys could not be regarded as expenditure laid out or expended only on or exclusively for the purpose of making or earning income chargeable under the head \"income from other sources. The Tribunal on the assessees appeal disagreed with the view taken by the authority and upheld the claim. Thus, deduction was allowed. The revenue sought a reference on the question of law formulated at page 521 of the report. In view of the divergence of judicial opinion, the Tribunal referred the question of law to the Hon'ble Supreme Court. 10. In dealing with the identical argument as was raised before us and on interpretation of Section 57, the Hon'ble Supreme Court held as under:- \"The determination of the question before us turns on the true interpretation of Section 57(iii) and it would. therefore, be convenient to refer to that section, but before we do so, we may point out that Section 57(iii) occurs in a fasciculus of sections under the heading, \"F-Income from other sources\", Section 56, which is the first in this group of sections, enacts in sub-section (1) that income of every kind which is not chargeable to tax under the head \"Income from other sources and subsection (2) includes in such income various items, one of which is \"dividends\". Dividend on shares is thus income chargeable under the head \"Income from other sources\" Section 57 provides for certain deductions to be made in computing the Income chargeable under the head \"Income from other sources and one of such deductions is that set out in which reads as follows: \"Any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning such income”. The expenditure to be deductible under Section 57(iii) must be laid out or expended wholly and exclusively for the purpose of making or earning such income. The argument of the revenue was that unless the expenditure sought to be deducted resulted in the making or earning of income, it could not be said to be laid out or expended for the purpose of making or earning such income. The making or earning of income said the revenue, was a sine qua non to the admissibility of the expenditure under Section 57(iii) and, therefore, if in a particular assessment year there was no income, the expenditure would not be deductible under that section. The revenue relied strongly on the language of Section 37(1) and, contrasting the phraseology employed in section 57(iii) with that in Section 37(1), pointed out that the legislature had deliberately used words of narrower import in granting the deduction under Section 57(iii), Section 37(1) 17 ITA Nos.34 & 35/PUN/2025 provided for deduction of expenditure laid out or expended wholly and exclusively for the purpose of the business or profession in computing the income chargeable under the head \"Profits or gains of business or profession\" The language used in Section 37(1) was \"laid out or expended for the purpose of the business or profession and not \"laid out or expended for the purpose of making or earning such income and set out in section 57(iii). The words in Section 57(iii) being narrower, contended the revenue, they cannot be given the same wide meaning as the words in Section 37(1) and hence no deduction of expenditure could be claimed under Section 57(iii) unless it was productive of income in the assessment year in question. This contention of the revenue undoubtedly found favour with the High Court but we do not think we can accept it. Our reasons for saying so are as follows- What Section 57(iii) requires is that the expenditure must be laid out or expended wholly and exclusively for the purpose of making or earning income it is the purpose of the expenditure that is relevant in determining the applicability of Section 57(iii) and that purpose must be fulfilled in order to qualify the expenditure for deduction. It does not say that the expenditure shall be deductible only if any income is made or earned. There is in fact nothing in the language of section 57(iii) to suggest that the purpose for which the expenditure is made should fructify into any benefit by way of return in the shape of income. The plain natural construction of the language of Section 57(iii) irresistibly leads to the conclusion that to bring a case within the section it is not necessary that any income should in fact have been earned as a result of the expenditure It may be pointed out that an identical view was taken by this court in Eastern Investments Ltd. v/s CIT (1951) 20 ITR 14 (SC) where interpreting the corresponding provision in section 12(2) of the Indian IT Act, 1922, which was ipsissima verba in the same terms as Section 57(1), Bose J speaking on behalf of the Court, observed: “It is not necessary to show that the expenditure was a profitable one or that in fact any profit was earned.\" It is indeed difficult to see how after this observation of the Court, there can be any scope for controversy in regard to the interpretation of Section 57(iii). It is interesting to note that, according to the revenue, the expenditure would disqualify for deduction only if no income results from such expenditure in a particular assessment year, but if there is some income, howsoever small or meagre, the expenditure would be eligible for deduction. This means that in a case where the expenditure is Rs. 1000/-, if there is income of even Rs 1/-, the expenditure would be deductible and there would be resulting loss of Rs.999/- under the head 'income from other sources\". But if there is no income, then, on the argument of the revenue, the expenditure would have to be ignored as it would not be liable to be deducted. This would indeed be a strange and highly anomalous result and it is difficult to believe that the legislature could have ever intended to produce such illogicality. Moreover, it must be remembered that when a profit and loss account is cast in respect of any source of income, what is allowed by the statute as proper expenditure would be debited as an outgoing and income would be credited as a receipt and the resulting income or loss would be determined. It 18 ITA Nos.34 & 35/PUN/2025 would make no difference to this process whether the expenditure is X or Y or nil, whatever is the proper expenditure allowed by the statute would be debited Equally, it would make no difference whether there is any income and if so, what, since whatever it be, X or Y or nil, would be credited. And the ultimate income or loss would be found. We fail to appreciate how expenditure which is otherwise a proper expenditure can cease to be such merely because there is no receipt of income Whatever is a proper outgoing by way of expenditure must be debited irrespective of whether there is receipt of income or not. That is the plain requirement of proper accounting and the interpretation of Section 57(iii) cannot be different The deduction of the expenditure cannot, in the circumstances, be held to be conditional upon the making or earning of the income. It is true that the language of Section 37(1) is a little wider than that of Section 57(iii), but we do not see how that can make any difference in the true interpretation of Section 57(iii) The language of Section 57(iii) is clear and unambiguous and it has to be construed according to its plain natural meaning and merely because a slightly wider phraseology is employed in another section which may take in something more it does not mean that Section 57(iii) should be given a narrow and constricted meaning not warranted by the language of the section and, in fact, contrary to such language\" 11. In our view, after this authoritative pronouncement by the Hon'ble Supreme Court, there is no scope for any other construction and particularly as suggested by Mr. Gupta. We are of the opinion that this judgment of the Hon'ble Supreme Court answers the issue of interpretation of Section 57(iii) squarely and in favour of the assessee. More so, when no contrary judgment of the Hon'ble Supreme Court has been brought to our notice, the argument that this judgment has been misinterpreted and misread by the Tribunal does not commend to us. The Supreme Court has held that the words in Section 57(iii) speak of purpose of the expenditure and that is relevant. The argument of Mr Gupta is that the purpose of the expenditure and in the present case, has a relation with the income that is to be eventually earned from the MSRDS bonds. That the bonds were disposed of means the income by way of interest thereon would not accrue any longer. Therefore, the deduction by way of interest on borrowings and which is stated to be a liability was not a permissible deduction. That is the precise argument which has been dealt with and the Hon'ble Supreme Court has clarified that the argument of the revenue that the expenditure would disqualify for deduction only if no income results from such expenditure in a particular assessment year, but if there is some income, howsoever small or meagre, the expenditure would be eligible for deduction. The Hon'ble Supreme Court gave an illustration in that regard and held that the when a profit and loss account is cast in respect of any source of income, what is allowed by the statute as proper expenditure would be debited as an outgoing and income would be credited as a receipt and the resulting income or loss would be determined. The Hon'ble Supreme Court held that how expenditure which is otherwise a proper expenditure can cease to be a such merely because there is no receipt of income, has not been explained by the revenue at all. It is in these circumstances the Hon'ble Supreme Court held that Section 57(iii) does not require that the purpose must be fulfilled so as to be expenditure qualified for deduction. The language of the section does not admit of 19 ITA Nos.34 & 35/PUN/2025 a construction that the expenditure shall be debited only if any income is made or earned. The Hon'ble Supreme Court, therefore, has concluded the issue and in our opinion, in favour of the revenue. In doing that, the Hon'ble Supreme Court refers to the views of several High Courts including this Court and upholds them. 12. Even with regard to section 36 and that is a deduction in relation to the computation of income under section 28, the Hon'ble Supreme Court in the case of Veecumsees v/s Commissioner of Income Tax, reported in (1996) 220 ITR 185, held that the cinema house was eventually sold makes no difference so long as the liability by way of borrowings continues and subsists. The Hon'ble Supreme Court held that the revenue had during the years when the assessee carried on the business of cinematographic films permitted as a deduction under Section 36(1)(iii), the interest on loans obtained by the assessee for the purpose of constructing the said theatre shows that, at the time when the loans were obtained the said theatre was a part of the business of the assessee. It was interest on these loans borrowed for the purpose of the business of the assessee which was being paid in the years in question. The Tribunal's view that such interest has to be treated as deduction under Section 36(1)(iii), has thus been upheld by the Hon'ble Supreme Court. The particular part of the business for which the loans had been obtained, had been transferred or closed down, did not alter the fact that the loans had, when obtained, been for the purpose of the assessee's business. 13. To our mind, when the Tribunal in the facts and circumstances of the present case applies this principle and allows the deduction by reversing the view taken by the Assessing Officer and the Commissioner of Income Tax (Appeals), then, we are of the opinion that the appeal does not raise any substantial question of law The view taken by the Income Tax Appellate Tribunal in this case is clearly in consonance with the legal principles set out by us herein above The Tribunal has adverted to the relevant and germane facts in relation to the assessee's claim. It has, therefore, not committed any error of law apparent on the face of the record or perversity in reversing the order passed by the Commissioner of Income Tax (Appeals). 14. As a result of the above discussion, the two appeals before us do not raise any substantial question of law. They are accordingly dismissed. No costs.” 21. We find the Ahmedabad Bench of the Tribunal in the case of Shri Girishbhai Vadilal Shah vs. DCIT 2024 (3) TMI 771 – ITAT Ahmedabad vide ITA No.429/Ahd/2018, order dated 15.03.2024 has observed as under: “5. We have heard both the parties and have also gone through the orders of the authorities below. After careful consideration of all of the above, we hold that the disallowance made of interest in the present case u/s.57(iii) of the Act is not sustainable. The reason for the same is simple. 20 ITA Nos.34 & 35/PUN/2025 As is evident from the order of the AO reproduced above, he has disallowed that portion of the interest expense incurred on loans taken which was in excess of the interest charged on loans given by the assessee. Which means that in sum and substance he accepted the usage of interest bearing funds for earning interest income when he allowed that portion of interest expense which was in parity with the interest charged by the assessee on loans/advances given. Having accepted this fact therefore the AO was precluded from making any disallowance of interest u/s 57(iii) of the Act since the only requirement to be fulfilled for claiming expenses under the said section is that they must have been incurred wholly and exclusively for the purpose of earning income from other sources. What is relevant therefore is only the nexus of expenditure for earning income and the quantum of expenditure incurred therefore is of no consequence. The Assessing Officer in his order passed u/s.143(3) of the Act himself interprets the provisions of section 57(iii) of the Act and notes that for allowability of expenses under the said section, the nexus of the expenditure with the earning of income is essential conditions to be fulfilled as reproduced at Paragraph No.5.5 of his order as under: “5.5 From the above, provisions, it can be appreciated that deduction from interest income is allowable u/s.57(iii) only. An analysis of this sub- section would show that in computing the income under this head the assessee is entitled to deduction in respect of the expenditure incurred solely for the purpose of earning such income, provided the expenditure is not of a capital nature and does not include any personal expenses incurred by the assessee. In other words, before this provision could apply, the following conditions must be fulfilled: (i) the expenditure must have been incurred solely and exclusively for the purpose of earning income or making profit; (ii) the expenditure should not be in the nature of a capital expenditure; (iii) the amount in question should not be in the nature of personal expenses of the assessee; (iv) that the expenditure should be incurred in the accounting year; and (v) There must be a clear nexus between the expenditure incurred and the income sought to be earned.” 5.1 Therefore, clearly the disallowance made u/s 57(iii) of the Act of Rs.54,32,948/- is contrary to law as interpreted by the Revenue authorities themselves. Moreover, we have noted that the Revenue authorities have also misinterpreted the provision of section 57(iii) of the Act by stating that expenses under the section can be allowed only if income is earned from the incurrence of the said expense, and the term income means profit earned. The Revenue authorities have made the disallowance in the present case noting that assessee 21 ITA Nos.34 & 35/PUN/2025 had made losses and therefore as earned no income. This finding of the Assessing Officer is at Paragraph No.5.6 of his order reads as under: “5.6. Now coming to the reply of the assessee and the contention that primary motive of incurring interest by the assessee is to earn income falling under the head „income from other sources‟. This contention of the assessee, however is devoid of substance, in view of the fact that the amount of interest paid by the assessee is higher than the amount of interest received. Had the primary motive of the assessee been to earn interest, no loss would have been possible on this account.” 5.2. The Ld.CIT(A) has confirmed this finding of the Assessing Officer. 5.3. This basis of the Assessing Officer is completely devoid of any merits, what the section requires is that expenses must have been incurred for the purpose of earning income to be eligible to claim the same against the said income. There is no question of interpreting the term “income as profits”. The moment expenditure has been incurred for earning income, the expenditure incurred for the same qualifies for deduction u/s.54(iii) of the Act. In the present case, it is not disputed that the assessee has earned interest income of Rs.1,08,39,837/-. Therefore, the Assessing Officer‟s finding that there is no income is factually incorrect and this basis of the Assessing Officer is, therefore, for denying the assessee‟s claim of expenditure u/s.57(iii) of the Act is liable to be quashed. Besides, there is again a basic fallacy in the reasoning as above of the Revenue authorities since as noted above by us they themselves have allowed a portion of the interest expense disallowing only the excess in comparison to the interest income earned. If no income was earned by the assessee, as is the case of the Revenue authorities, then the entire interest expense ought to have been disallowed. Further, we find that the Assessing Officer mentions at Paragraph No.5.8 in his order that the assessee claimed to have been interest from his OD account with Kalupur Bank for lending money and receiving money and thus establishing nexus between the funds borrowed on interest and utilized for making advances for earning interest thereon for claiming interest expenses against the interest income earned. We find that the Assessing Officer has dismissed this contention of the assessee stating that there ought to be a clear nexus between the expenditure incurred and the income earned as observed by the Hon‟ble Apex Court in its decision reported at 110 ITR 664. The Assessing Officer has not stated as to how in the light of the facts stated by the assessee, the nexus was not established, he has just summarily dismissed the contention of the assessee. In the absence of the Assessing Officer pointing out as to how despite the assessee‟s explanation, there was no nexus between the interest bearingfunds and their utilization for making advances for earning interest income, no disallowance u/s 57(iii) of the Act was tenable. 22 ITA Nos.34 & 35/PUN/2025 In view of the above, we hold that the disallowance of interest expenses u/s.57(iii) of the Act confirmed by the Ld.CIT(A) was incorrect and unwarranted. The same is, therefore, directed to be deleted. Thus, grounds of appeal of the assessee are allowed. 6. In the result, the appeal of the assessee is allowed.” 22. Respectfully following the decisions cited (supra), we are of the opinion that the Assessing Officer was not justified in disallowing the claim of interest expenditure of Rs.1,43,29,828/- and Ld. CIT(A) was not justified in confirming the same. We, therefore, set aside the order of the Ld. CIT(A) and direct the Assessing Officer to delete the disallowance. The second issue raised by the assessee in the grounds of appeal is accordingly allowed. ITA No.35/PUN/2025 (A.Y. 2019-20) 23. The grounds raised by the assessee are as under: 1. On the facts and circumstances of the case the learned Commissioner of Income Tax (Appeals) has erred in denying the appellant the carry forward of House Property loss amounting to Rs.2,00,000/- without appreciating the facts of the case in the proper perspectives. Therefore, the appellant requests your honour to allow the loss under House Property. 2. On the facts and circumstances of the case the learned Commissioner of Income Tax (Appeals) has erred in restricting the allowability of interest expenditure only to the extent of Rs.5,09,71,571/- and disallowing the balance interest of Rs.41,77,229/- and resultantly making the addition of Rs.35,92,229/- under the head Income from Other Sources without appreciating the facts of the case in the proper perspectives. 3. On the facts and circumstances of the case the learned Commissioner of Income Tax (Appeals) has erred in treating Agricultural income of Rs.95,841/- as taxable Income without appreciating the facts of the case in the proper perspectives. 4. On the facts and circumstances of the case the learned Commissioner of Income Tax (Appeals) has erred in not allowing a deduction of Rs.1,75,000/- under chapter VI-A without appreciating the facts of the case in the right perspectives. 23 ITA Nos.34 & 35/PUN/2025 5. The appellant reserve the right to amend, alter or add to the ground of appeal. 24. Ground No.1 relates to the order of the Ld. CIT(A) in confirming the disallowance of Rs.2 lakh being the interest paid on borrowed capital for self house property. 25. After hearing both sides, we find the above ground is identical to the ground No.1 raised in ITA No.34/PUN/2025. We have already decided the said issue and restored the same to the file of the Assessing Officer for fresh adjudication. Following similar reasonings, the ground No.1 raised in ITA No.35/PUN/2025 is also restored to the file of the Assessing Officer for fresh adjudication. Ground No.1 raised by the assessee is accordingly allowed for statistical purposes. 26. Ground No.2 relates to the order of the Ld. CIT(A) in confirming the disallowance of Rs.41,77,229/- made by the Assessing Officer out of interest expenditure. 27. After hearing both sides, we find the above ground is identical to the ground No.2 raised in ITA No.34/PUN/2025. We have already decided the said issue and allowed the same. Following similar reasonings, the ground No.2 raised in ITA No.35/PUN/2025 is also allowed. 24 ITA Nos.34 & 35/PUN/2025 28. Ground No.3 raised by the assessee relates to the order of the Ld. CIT(A) in treating agricultural income of Rs.95,841/- as taxable income. 29. After hearing both sides, we find the Assessing Officer in the instant case disallowed the claim of agricultural income on the ground that the assessee did not furnish the supporting documents to prove that the agricultural activity was being carried out by him for earning the agricultural income of Rs.95,841/-. He, therefore, treated the same as ‘Income from other sources’. We find the Ld. CIT(A) confirmed the action of the Assessing Officer in absence of any documentary evidence filed before him except 7/12 extract of land. It is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate his claim by filing the requisite details before the Assessing Officer since the case was not handled properly before the Assessing Officer as well as the Ld. CIT(A). Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate his claim by filing the requisite details and decide the issue as per fact and law. We hold and direct accordingly. Ground No.3 raised by the assessee is accordingly allowed for statistical purposes. 30. Ground No.4 raised by the assessee relates to the order of the Ld. CIT(A) in confirming the disallowance of deduction of Rs.1,75,000/- under Chapter VI-A. 25 ITA Nos.34 & 35/PUN/2025 31. After hearing both sides, we find the Assessing Officer in the instant case disallowed the claim of deduction of Rs.1,75,000/- made under Chapter VI-A in absence of any supporting documentary evidence. We find the Ld. CIT(A) confirmed the action of the Assessing Officer on the ground that the assessee failed to furnish the details of medical insurance premium, LIC policy and repayment of principal amount of housing loan. It is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate his claim by filing the requisite details before the Assessing Officer. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate his claim by filing the requisite details and decide the issue as per fact and law. We hold and direct accordingly. Ground No.4 raised by the assessee is accordingly allowed for statistical purposes. Other grounds being general in nature are dismissed. 32. In the result, both the appeals filed by the assessee are partly allowed for statistical purposes. Order pronounced in the open Court on 27th June, 2025. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 27th June, 2025 GCVSR 26 ITA Nos.34 & 35/PUN/2025 आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. 5. The Pr.CIT concerned. DR, ITAT, ‘A’ Bench, Pune गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune S.No. Details Date Initials Designation 1 Draft dictated on 24.06.2025 Sr. PS/PS 2 Draft placed before author 26.06.2025 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order "