TMI Blog2004 (7) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... any other expenditure, which is not in the nature of capital expenditure and is laid out or expended wholly and exclusively for the purpose of making or earning such income. The respondent-assessee must have incurred some expenses for earning interest income other than the exempted interest income and, therefore, if the Tribunal has fixed five per cent. of the taxable interest income as a deduction while computing the income from other sources, it cannot be said that the Tribunal has committed any illegality - - - - - Dated:- 27-7-2004 - Judge(s) : R. K. AGARWAL., K. N. OJHA. JUDGMENT The Income-tax Appellate Tribunal, Allahabad, has referred the following question of law under section 256(1) of the Income-tax Act, 1961 (hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference. The disallowance was also confirmed by the Commissioner of Income-tax (Appeals). The assessee appealed to the Tribunal. Before the Tribunal, learned counsel for the assessee submitted that the latter being a co-operative society had maintained not only a registered office but also the necessary staff and had incurred expenses on accounting, audit, etc., in order to comply with the various statutory requirements which were essential for the very existence of the society. It was further submitted by him that even for earning income from other sources, some expenses were necessary. He, therefore, submitted that the revenue authorities were not justified in not allowing any expenditure for earning interest income. On the other hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income from interest may be held to be attributable expenses for earning the interest income. Here it would be necessary to point out that the entire interest income of the assessee is not liable to tax and the assessee cannot claim deduction of expenses for earning the interest income or other income, which are claimed to be exempt and which are not liable to tax. We, therefore, direct that out of the income from interest and other incomes which are held by the Revenue authorities to be liable to tax, five per cent, should be allowed on account of estimated expenses for earning that income. The Income-tax Officer is directed to work out the relief on this issue to the assessee for both the assessment years accordingly." We have hear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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