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2017 (8) TMI 121 - HC - Income TaxNetting of the interest paid and the interest received - not setting off the same but taxing the gross receipts - business unit closed - Held that:- The factual matrix reveals that the company was closed on December 2, 1983. It is undisputed that no business was being carried out, the interest accrued cannot be termed as business expenditure and the interest which was paid was in the course of winding up of the company. In view of the fact that the claim of secured creditors against the claim of the workers under section 529 of the Companies Act, 1956, will not take precedence, the fixed deposit receipt was got made. Taking into consideration the fact, the interest income is to be reckoned as income from other sources. The netting of the interest paid and the interest received is not permissible. Section 57(iii) of the Income-tax Act also does not help the assessee, in peculiar facts of the case, the assessee cannot be heard to say that it has spent ₹ 5,33,23,380 for earning interest of ₹ 59,31,141 on the fixed deposit receipt . Hence, the view taken by the Tribunal is just and proper - Decided against assessee.
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