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2020 (11) TMI 278 - AT - Income TaxEligibility for deduction of interest u/s.57 - interest income of deposits under the head ‘income from other sources’ - CIT(A) had restricted allowability of interest expenditure only to the extent of interest receipts under the head ‘income from other sources’ - HELD THAT:- As decided in CASCADE HOLDINGS PVT. LTD. AND VICE-VERSA. [2020 (3) TMI 1252 - ITAT MUMBAI] the investment as well as the fund management are under the supervision of the Hon'ble Spl. Court, assessee has no role to play. From the facts on record, prima facie, it appears that there is a nexus between the borrowed funds on which assessee has paid interest and the investment on which it has earned interest income. Therefore, the assessee should get deduction of interest expenditure to the extent of interest income earned - It is relevant to observe, in assessee's own case in AY 2017-18, the AO himself has allowed claim of deduction of interest expenditure to the extent of interest income earned during that year. In view of the aforesaid, the ground is allowed as indicated above. Thus we direct the ld. AO to restrict the disallowance of interest to the extent being the interest income received on term deposits. Accordingly, the ground No.1 raised by the assessee is allowed for statistical purposes. Charging of interest u/s.234A, 234B & 234C - Interest for all the assessment years which was charged without giving credit for tax deducted at source - HELD THAT:- As in case of Sudhir S. Mehta [2017 (12) TMI 1668 - ITAT MUMBAI] the issue was decided that interest levied under section 234A, 234B & 234C be recomputed after excluding the income which is subject to TDS. Therefore, Assessing Officer is directed to recompute the interest accordingly. In the result, these grounds of appeal are allowed for statistical purpose.
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