Arun Khodpia ORDER
Arun Khodpia, Member (A)
1. The captioned appeal is filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi, dated 19.10.2022 which in turn arises from the order by Ld. Assessing Officer u/s. 143(3) dated 19.12.2019 for A.Y.2017-18. The grounds of the appeal raised by the assessee are as under:
"1. The learned AO erred in disallowing part of interest expense claimed under section 57 amounting to Rs. 5,58,088 and the learned CIT(A) erred in upholding the same.
2. The learned CIT(A) erred in not appreciating the submissions made by the assessee in respect of disallowance of interest of Rs. 5,58,088.
3. The learned CIT(A) erred in not providing cogent reasons while upholding the disallowance made by the learned AO of Rs. 5,58,088.
4. The learned CIT(A) although allowed the ground of appeal as partly allowed however, no relief was granted by the learned CIT(A).
5. The Appellant prays leave of the Hon'ble Tribunal to add, amend, alter any of the Grounds of Appeal."
2. Brief facts in this case are that the assessee is an individual derives income under the head income from house property and profit and gains of business income from other sources, had filed return of income for A.Y.2017-18 on 30.03.2018 declaring total income at Rs. 4,78,990/-. Subsequently the case of the assessee was selected for scrutiny assessment through CASS to examine the issue "large deduction claimed u/s.57". Proceedings were initiated after issuing statutory notices and calling for details. From assessment records, the A.O had observed that the assessee had received interest income and also paid interest to different entities, for which, deduction was claimed u/s.57 of the Act. On verification of the submissions filed by the assessee, it was observed by the A.O that the assessee had received interest income of Rs. 23,88,078/- and bank interest of Rs. 60,978/- against which interest payment of Rs. 26,41,032/- were claimed as expenditure u/s.57 of the Act and thereby showed loss of Rs. 1,91,976/- under the head "income from other sources". The assessee was requested to furnish details of interest paid account containing details for each party to which the assessee has furnished details of interest received. On perusal of these details, it is observed that interest @15% was received from all advances given and interest ranging from 15% to 16.8% as paid to various lenders. When chart of interest received and ledger accounts of the advances were further examined by the A.O, he observed that information furnished by the assessee was not fully correct and in following cases interest received was @9%, 9.7% and 14% instead of 15%. A chart of such interest received from the party was reproduced in the assessment order and the same is extracted as under:
With such observations, the A.O in the cases of two parties from whom the assessee had received interest of 9%, 9.7% had disallowed difference by reducing the said rates from 16% and the disallowance was proposed for Rs. 5,58,088/-. The details of the said addition are as under:
"1. Youth Foundation of India Op. Balance Rs. 6752513/- Interest @6.3 % (16-9.70) Rs. 4,25,4081/- added to the total income of the assessee.
2. Yugantar Education society Op. Balance Rs. 1895440/- Interest @7 % (16-9) Rs. 1,32,680/- added to the total income of the assessee."
Certain additions were also made by the A.O with respect to disallowance of expenditure and unexplained cash deposits u/s.69A of the Act, since such additions were deleted by........