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2009 (1) TMI 261 - HC - Income TaxDeduction u/s 57(iii) – the term “purpose” – income form other sources - assessee has adopted a policy of extending loans to its employees. These loans are extended to enable the employees to purchase houses and motor vehicles. assessee charges interest on the loans extended to the employees. - The issue - whether the interest income derived by the respondent-assessee can be set off as against the interest paid by the respondent-assessee for taking a loan from the NABARD? – held that - the term “purpose” referred to in clause (iii) of section 57 of the 1961 Act, for the present controversy, is relatable to the activity of the respondent-assessee in earning income by extending loans to its employees. In so far as the deduction conceived of under clause (iii) of section 57 of the 1961 Act is concerned, the same is relatable only to expenditure incurred for the said “purpose” – deduction of expenditure of interest paid to NABARD not allowed.
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