TMI Blog2010 (12) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... n the one hand, the bank advanced loan to the assessee and on the other hand, the same amount was converted into FDRs - It is not in dispute that the assessee intends to pay the tax on the extra interest earned on the said FDRs, what the assessee wanted to adjust therefrom the interest paid by it to the bank against the borrowed funds - The interest paid had to be allowed under the provisions of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t earned on the FDRs was more than the interest which the assessee paid on the loans. The assessee had shown the interest earned on the FDRs as "income from other sources". However, at the same time, the interest which was paid by the assessee to the bank on the loans was reduced from the interest earned on the FDRs. In this manner, netting of the interest was done by the asses-see and the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue one will have to go into the peculiar nature of the transaction entered into by the assessee. The assessee had given its detailed explanation to the Assessing Officer, inter alia, stating that it had borrowed a sum of Rs. 35.34 crores directly from the banks to make the FDRs, that is to say, on the one hand, the bank advanced loan to the assessee and on the other hand, the same amount was con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spute that the assessee intends to pay the tax on the extra interest earned on the said FDRs, what the assessee wanted to adjust therefrom the interest paid by it to the bank against the borrowed funds. Section 57(iii) of the Act reads as under : "any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earnin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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