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2014 (11) TMI 317 - HC - Income TaxClaim of expenses incurred in earning interest declined – Held that:- The assessing authority did not accept the return filed by the assessee declaring a loss of ₹ 22,07,204 - It has disallowed the loss claimed and has made the additions in respect of Guest Fees, Interest received from Banks, Interest received on KEB Deposit, Discount received from liquour manufacturers and Outsourcing income from canteen activity - The authorities ought to have considered whether any expenditure is incurred in this regard - If any expenditure is incurred, it should have been deducted out of the interest income - Though the assessee declared loss, he has disallowed the same - when the assessing authority has chosen to take out the interest income and levied the income tax, the expenditure incurred if any, should have been taken into consideration in arriving at the income - the exercise has not been done – thus, the matter is remitted back to the Assessing authority only to consider whether the assessee has incurred any expenditure permissible in law in earning Interest Income from Banks, so that it could be given deduction before that income is taxed – decided partly in favour of assessee.
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