Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2009 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2009 (11) TMI 562 - KERALA HIGH COURTIncome from other sources – Deduction – Interest on borrowed capital – Held that: it is very clear that the assessee had not borrowed any funds for making deposit with the same bank for the purpose of earning interest. Since no amount is borrowed from the bank for making deposit, the claim of deduction of interest paid on borrowed funds in the computation of income from other sources under section 57(iii) of the Income-tax Act is not tenable. It is obvious from the provision of 57(iii) that unless funds are borrowed for making the deposit to earn interest, such interest paid on borrowed funds cannot be allowed as deduction in the computation of income from other sources which in this case is interest earned on deposit. From the facts stated above, there can be no doubt that funds transferred from cash credit/packing credit are nothing but the assessee's amount credited in such account and not borrowed funds converted to deposit account by the assessee. - Decided in favor of revenue.
|