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2019 (12) TMI 357 - AT - Income TaxDeduction u/s 57 (iii) - disallowing the assessee’s claim of deduction of interest u/s 57(iii) against the interest received by him - HELD THAT:- For claiming deduction u/s 57(iii) it would be sufficient to prove that there is nexus between the income earned and amount expended. In view of that matter, all the requirements for claiming deduction u/s 57(iii) are fulfilled and therefore assessee’s claim of interest of ₹ 49,38,149/- laid out “wholly and exclusively” for the purpose of earning interest shown under the head “Income from Other Sources” can be legally allowed u/s 57(iii) of the Act. CIT has neither verified nor commented to establish nexus between the funds borrowed and advanced for claim of such interest expenses before arriving at such conclusions. The finding of CIT(A) are not supported by corroborative factual evidence in arriving at the conclusion about the intention of the assessee whether his intention was to earn profit or losses and further the department has accepted such a practice adopted by assessee in the past assessment years. The intention to earn interest is disputed by either of the subordinate authorities or adversely commented by the ld. CIT (A) or controverted by the ld. DR and therefore, such interest expenditure, deductible under section 57(iii) can be allowed even if it is not claimed in full by the assessee in the peculiar facts of the case at hand. Considering the factual matrix of the case and legal precedents, we accept the grievance of the assessee justified. Accordingly, we allow the claim u/s 57(iii) of the Act, as legally justified - Decided in favour of assessee.
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