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2010 (6) TMI 75 - HC - Income TaxInterest on interest free loan – deletion of addition made account of interest on interest free loan – computation of deduction u/ 80M - deduction u/s 80M should be computed without apportioning any part of interest payment to the earning of the dividend – Held that - deduction available to an assessee under Section 36(1)(iii) of the Income Tax Act, 1961 in respect of the interest component on capital borrowed is to be determined in consonance with the judgment rendered by the Apex Court in S.A. Builders Ltd. vs. Commissioner of Income-Tax (Appeals) and another [2008 -TMI - 3364 - SUPREME COURT] so as to determine the commercial expediency of the assessee, in extending interest free loan - for the sake of consistency, set aside the order of the Tribunal on the first question of law - The CIT(A) had inferred that there could hardly be any expenditure incurred for collecting dividend income received from the UTI and for the remaining dividend income of Rs. 8,00,000/- or so the expenses could not be as high as estimated by the Assessing Officer. The aforesaid findings of the CIT(A) have been duly affirmed by the Tribunal upholding the disallowance of Rs. 1,00,000/- sustained by the CIT(A) for allowing relief under Section 80M. - second question deserves to be answered against the revenue and in favour of the assessee
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