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2016 (2) TMI 113 - AT - Income TaxDisallowance of interest expenditure - nexus between the impugned interest income vis-à-vis the interest expenditure - Held that:- CIT(A) has treated the assessee’s fixed deposit income of ₹ 22.5 lacs under the head other sources to be exempt. His claim of corresponding interest expenditure made u/s 57(III) qua any other expenditure not being in the nature of capital expenditure laid out or expended wholly and exclusively for the purpose of making or earning such income has been accepted. We have already given details of the same in the preceding paragraphs. The Assessing Officer invoked the impugned disallowance quoting assessee’s failure in proving nexus between the impugned interest income vis-à-vis the interest expenditure. The lower appellate authority follows case law of SA Builders (2006 (12) TMI 82 - SUPREME COURT ) accepting plea of commercial expediency involved in a case of borrowed funds being advanced to a sister concern without charging interest. The same is nowhere applicable qua the facts of the instant case wherein no nexus between the impugned income and interest is forthcoming. Thus, we accept Revenue’s arguments. The Assessing Officer’s findings disallowing the impugned interest expenditure are accordingly restored. - Decided in favour of revenue
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