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2017 (12) TMI 1611 - AT - Income TaxDisallowance of interest expenses as attributable to earning of dividend income - Held that:- We find that the assessee has earned dividend income of ₹ 7,338/- from investment activities carried out by him which is claimed as exempt from Income Tax Act. AO has disallowed the interest expenditure to the tune of ₹ 3,05,731/- against the aforesaid expenditure. We find merit in the limited plea of the assessee that the expenditure should be restricted to the extent of dividend income. A decision of the Hon’ble Delhi High Court in the case of CIT vs. Taikisha Engineering (I) Ltd. [2014 (12) TMI 482 - DELHI HIGH COURT] where in similar facts observed that the disallowance of expenditure should not ordinarily exceed dividend income. In the light of forgoing discussion, we direct the AO to restrict the disallowance of interest expenditure to the extent of dividend income actually earned. - Decided partly in favour of assessee
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