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2020 (8) TMI 435 - AT - Income TaxDisallowance of deduction u/s 57(iii) - Interest on Loan - income under the head “income from other sources” which was on account of interest from saving bank account and FDR - HELD THAT:- In the present case, the interest paid on the loans raised against the FDR was having the direct nexus with the interest received from the FDRs and the assessee choose to save the penalty of 1.5% by raising the loans at 1% higher rate of interest than the interest rate on FDR thus there were saving of 0.5%. As regards to the decisions relied by the A.O. and considered by the Ld. CIT(A) i.e; CIT Vs. Dr. V.P. Gopinathan [2001 (2) TMI 10 - SUPREME COURT] it is noticed that the same is distinguishable from the facts of the assessee’s case, since the issue in the said case was not relating to the applicability of section 57(iii) of the Act rather in the said case the loan was raised from different bank on which interest was paid while the interest was earned on the FDR with the different bank, so there was no nexus. We therefore by considering the facts of the present case as discussed herein above, are of the view that the disallowance sustained by the Ld. CIT(A) was not justified, accordingly, the same is deleted. Appeal of the Assessee is allowed.
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