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2020 (3) TMI 955 - AT - Income TaxDisallowance on account of expenditure claimed by the assessee u/s 57(iii) - loss that the expenses incurred for the purpose of investment is not substantiated by placing any material on record except the FDR/Saving from which he earned the interest income - nexus between the loan taken from NBFCs and the amount invested in FDR - Disallowance of interest expenditure have been incurred wholly and exclusively for the purpose of earning the interest income - HELD THAT:- It is a settled law that the deduction u/s. 57(iii) of the Act will be allowable even if no income is earned by the assessee u/s. 56 of the Act. The language of section 57(iii) of the act does not anywhere specifies that any income should have been earned as a result of the expenditure incurred. It only specified that the purpose of expenditure should be that of earning income, it is mandatory that income should have been earned by the assessee. Keeping in view the facts and circumstances of the present case, the addition in dispute is contrary to law and facts on the file and therefore, the same is hereby deleted Revenue authority has not doubted the nexus between the loan taken from NBFCs and the amount invested in FDR is not doubted by the Assessing Officer. It is a settled law that the deduction u/s. 57(iii) of the Act will be allowable even if no income is earned by the assessee u/s. 56 of the Act. The language of section 57(iii) of the act does not anywhere specifies that any income should have been earned as a result of the expenditure incurred. It only specified that the purpose of expenditure should be that of earning income, it is mandatory that income should have been earned by the assessee. Addition in dispute is contrary to law and facts on the file and therefore, the same is hereby deleted - See RAJENDRA PRASAD MOODY [1978 (10) TMI 133 - SUPREME COURT], VODAFONE SOUTH LTD (FORMELY KNOWN AS M/S. VODAFONE SOUTH ESSAR AND HUTCHISON ESSAR SOUTH LTD) [2015 (10) TMI 22 - DELHI HIGH COURT] and RAJ KUMAR SHARMA VERSUS ACIT, CIRCLE 61 (1) , NEW DELHI [2019 (10) TMI 636 - ITAT DELHI] - Decided in favour of assessee.
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