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2018 (5) TMI 577 - AT - Income TaxClaim of legal expenses u/s 57(iii) against interest income - expenditure for recovering FD and interest - direct nexus - AO objected for claiming the entire expenses in the assessment year 2014- 15 - Held that:- The fate of the assessee to get back his investment was not automatic, but by the directions of the Hon’ble High Court. The Hon’ble High Court of Madras has rendered justice to the assessee by directing the respondent bank to pay the amount payable to him under seven FDRs treating the said amount as if it was continuing in fixed deposits till date with the same rate of interest till the amount is paid by the bank. The award of interest thereon till the date of order of the Hon’ble High Court, of course, not automatic or by any provision or to say a natural consequence to the retrieval of the investment, but, only by the specific directions of the Hon’ble High Court of Madras. Thus, we hold that the expenditure incurred by the assessee was wholly an exclusively for the purpose of earning of the income to qualify deduction under section 57(iii) and admissible subjected to basic checks under the Act. AO will allow the legal expenses for which the assessee has produced valid bill - With regard to the claim of travel expenses, AO is directed verify the posting of the assessee’s case for putting his appearance/meeting with his advocate and allow the claim after satisfying that there was no personal element involved for claiming the travel expenses. - Decided in favour of assessee for statistical purposes.
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