Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2012 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (12) TMI 898 - HC - Income TaxAddition on account of excess interest expense – Interest on Fixed deposit – Assessee is a financial enterprise – Interest paid in excess of the limit under Kerala Money Lenders Act - Explanation to Section 37 – Expenditure prohibited by law or constitutes an offence Assessee contended that even where the income was found to be illegal, it was held that loss could be claimed as a deduction. If the income is tainted and he is forced to pay the tax, he poses the question as to how it could be held that the amount which is paid in excess of the legal limit under the Money Lenders Act should not be allowed to be deducted from the income Held that:- Even though the purpose for which the amount was expended may not lead to the commission of an offence, the expenditure by way of payment of interest in excess of the limit imposed under the Kerala Money Lenders Act is prohibited. The grant of interest at the rate an excess of 14% is prohibited. The amount of deduction claimed by the appellant represents money paid as interest in excess of 14%. Therefore, the expenditure is in the teeth of the explanation to Section 37 which is the legal provision applicable. In favour of revenue
|