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2005 (2) TMI 442 - ITAT BOMBAY-FIncome From Other Sources - interest income earned during the pre-operative period - deductible u/s 57(iii) - HELD THAT:- Since consolidated details of expenses have been maintained, apportionment has been done by the assessee on pro-rata basis. It is seen that the assessee-company has also taken into account the various administrative expenses. On estimate basis, the assessee-company has apportioned these administrative expenses as pertaining to earning of interest income. In our view, all administrative expenses have been primarily incurred for the purpose of the assessee's business and the assessee-company is not required to incur such administrative expenses for earning interest income, which flows from the term deposits made with the banks. Therefore, in our view, the administrative expenses or part thereof cannot be allowed u/s 57(iii). Only interest expenditure is required to be apportioned to the investment which are yielding interest income to the assessee. The Assessing Officer is, therefore, directed to work out the quantum of interest expenditure, which is allowable u/s 57(iii) on pro-rata basis as per the details already made available by the assessee and reproduced by the ld. CIT(A) in his order, in respect of all the three assessment years. Opportunity shall be allowed to the assessee. In the result, while the appeals are allowed.
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