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2018 (9) TMI 100 - AT - Income TaxDisallowing set off of interest income - netting off of interest - deduction for the payment of interest u/s 57 - Held that:- There is no dispute that the Assessing Officer has himself accepted that the Fixed Deposits made in ING Vysya Bank were out of the surplus funds of bank loans. Hon'ble Supreme Court in the case of ACG Associated Capsules [P] Ltd [2012 (2) TMI 101 - SUPREME COURT OF INDIA] has categorically held that netting off of interest is permissible. Interest earned from the bank and interest paid to the bank has to be netted off and only surplus interest becomes income of the assessee. Assuming, yet not accepting that interest earned by the assessee has to be taxed under the head income from other sources, then also the assessee is entitled for deduction for the payment of interest u/s 57 of the Income tax Act, 1961. Thus Interest income has to be netted off and we direct the Assessing Officer to allow netting off of interest earned from interest paid. - decided in favour of assessee
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