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2020 (5) TMI 111 - ITAT BANGALORENetting of interest income - whether or not income paid on interest against the fixed deposits can be said to have been incurred "wholly and exclusively" for the purpose of earning interest income from fixed deposits? - assessee made fixed deposit with various banks and at the same time, the assessee availed loan from State Bank of India and claimed the interest to be set off against the interest received from various banks from fixed deposits - HELD THAT:- The assessee’s payment of interest has no nexus between the earning of income. Facts in the present case is similar to that of the one considered by the Hon’ble Supreme Court in the case of CIT v. V.P.Gopinathan [2001 (2) TMI 10 - SUPREME COURT] in which it has been held that interest on loan taken by the assessee from the bank on secured fixed deposit could not be reduced from his income by way of interest on the fixed deposit placed by him in the bank. As decided in M/S HARYANA STATE SMALL INDUSTRIES & EXPORT CORPORATION L [2012 (8) TMI 1178 - PUNJAB AND HARYANA HIGH COURT] there is nothing to show that the expenses claimed as deduction were incurred for earning interest income. Equally, the claim of the appellant that the expenditure incurred by the assessee was allowable under Sections 30 to 37 of the Act is inadmissible for the reason that the business of the assessee was lying closed and income from interest was chargeable to tax as 'income from other sources' under Section 56 of the Act. Once that was so, the Tribunal had rightly adjudicated the matter in favour of the revenue. - Decided against assessee.
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