TMI Blog1987 (4) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... d income from the other sources " in the shape of interest, dividends, etc. The relevant year of assessment is 1966-67. During this year, the assessee claimed deduction of Rs. 26,986 being interest paid to Harivallabhdas Kalidas Estate on loans taken by her. The Income-tax Officer found that out of the loans, real investment was for a sum of Rs.1,250 only. He disallowed the claim to the extent of Rs. 10,279 on proportionate basis. According to him, this claim could not be admitted under section 57(iii) of the Income-tax Act, 1961. Assessee's first appeal to the Appellate Assistant Commissioner was rejected. The Appellate Authority relied upon the ratio of the decision of the Bombay High Court in Bai Bhuriben Lallubhai v. CIT [1956] 29 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncidental. The High Court further found that portion of the loan was not intended to meet expenditure wholly and exclusively for the purpose of earning the income and, therefore, did not come under section 57(iii) of the Act. It is not disputed by Mr. Ramachandran for the assessee that unless the claim comes within the purview of section 57(iii) of the Act, it would not be admissible as a deduction. That section as far as relevant provides: "The income chargeable under the head 'Income from other sources' shall be computed after making the following deductions, namely:-..... (iii) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 any of the heads specified in section 14, items A to E, shall be chargeable to tax under the head 'Income from other sources ' and sub-section (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 clause (iii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenditure should be wholly and exclusively for the purpose of earning the income. The fact-finding authorities have come to the conclusion that no part of the expenditure came within the purview of section 57(iii) of the Act. Mr. Ramachandran then maintained that even if there was an indirect link between the expenditure and the income earned, the claim would be admissible and relied upon the observations of Bose J. in Eastern Investments' case [1957] 20 ITR 1 (SC). No attempt has been made by the assessee to point out before the taxing authorities or even before the High Court by placing the necessary facts to justify such a claim. On mere assumptions, such a point cannot be allowed to be raised here for consideration. In fact, un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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