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2014 (5) TMI 940 - HC - Income TaxInterpretation of Section 36 and Section 57 of the Act – Allowability of deduction on bonds – Held that:- Following Commissioner of Income-Tax, West Bengal III Versus Rajendra Prasad Moody [1978 (10) TMI 133 - SUPREME Court] - the words in Section 57(iii) speak of purpose of the expenditure and that is relevant - the argument of the revenue that the expenditure would disqualify for deduction only if no income results from such expenditure in a particular assessment year, but if there is some income, howsoever small or meagre, the expenditure would be eligible for deduction - the when a profit and loss account is cast in respect of any source of income, what is allowed by the statute as proper expenditure would be debited as an outgoing and income would be credited as a receipt and the resulting income or loss would be determined - how expenditure which is otherwise a proper expenditure can cease to be a such merely because there is no receipt of income, has not been explained by the revenue at all - Section 57(iii) does not require that the purpose must be fulfilled so as to be expenditure qualified for deduction - The language of the section does not admit of a construction that the expenditure shall be debited only if any income is made or earned - the Tribunal in the facts and circumstances had allowed the deduction, then, the appeal does not raise any substantial question of law – Decided against Revenue.
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