Disallowance of interest claimed under head ifos

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MANIKANTA (Querist)
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12 September 2014 My client had received intimation u/s 143(1) it showing a disallownce of Rs50000 (Interest paid on loans) claimed in the IFOS.Reason is for the purpose of his business he taken loans for that loans he paid an interset of Rs 50000.But the loans are accounted in his personal books and he claimed the interest in the head of IFOS.He don't have any other income under IFOS.But the dept disallowed the interest paid and demand was raised.it's urgent Please send me the reply how can i claim that interest amount.

CA VISHWAKEERTHI.P.S.

CA VISHWAKEERTHI.P.S. (Expert)
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12 September 2014 Not allowable under individual capacity . It should be claimed in the business as expenses i.e, deductible item under the head business income not under the head income from other source.

During the processing the return CPC had the right to remove the arithmetical error and wrong claim in the return . So You need to go appeal for correct claim and rectify it.

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MANIKANTA

MANIKANTA (Querist)
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12 September 2014 Thank u Vishwakeerthi sir.ButI have small doubt In Business P&L A/C directly we can taken as expenses for the Interest paid.Or we need to trnasfer all loans from personal books to the Business.

CA VISHWAKEERTHI.P.S.

CA VISHWAKEERTHI.P.S. (Expert)
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12 September 2014 Advisable to transfer loan to business.

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