New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (1) TMI 227 - PUNJAB AND HARYANA HIGH COURT

2016 (1) TMI 227 - PUNJAB AND HARYANA HIGH COURT - TMI - Interest on FDRs - Whether Tribunal has failed to adjudicate the issue in treating the interest on FDRs income under the head income from other sources and allowed the corresponding deduction of interest expenses under section 36(1)(iii) instead under section 57(iii) - Held that:- The FDRs were kept in the bank as margin money of obtaining loans. In support of the connection of the interest paid on loan with the FDRs in question, the asses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ht and especially in view of the fact situation, that there was no material has been referred to by the CIT(Appeals) to hold that the interest expenditure has not been expended for the impugned FDR, we do not find any weight in the aforesaid conclusion by the CIT(Appeals). As a consequence, it has to be held that the interest paid to ICICI and IDBI band on funds utilized to make the impugned FDRs is an allowable deduction under section 57(iii) against the interest income on such FDRs. Thus, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ondent : Mr. Ravi Shankar, Advocate with Mr. B.M.Monga, Advocate Ajay Kumar Mittal,J. 1. This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 15.10.2008, Annexure A.3 passed by the Income Tax Appellate Tribunal, Chandigarh Bench, 'B' in ITA No.356/Chandi/2008, for the assessment year 2001-02, claiming following substantial question of law:- Whether on the facts and in the circumstances of the case and in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

income filed on 30.10.2001 including income under the head 'income from business and profession' of ₹ 1,36,478/- and a loss of ₹ 25,617/- under the head 'income from other sources'. The loss under the head 'income from other sources' was computed as under:- Interest from banks on FDRs ₹ 11,31,147/- Less :Interest expenditure ₹ 11,56,764/- Loss ₹ 25,617/- The Assessing officer vide order dated 20.12.2007, Annexure A.1 determined income at S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o reduce the capital cost and this plea had been upheld by the CIT(A). Consequently, the appeal was partly allowed by the CIT(A) vide order dated 27.2.2008, Annexure A.2. Against the balance income of ₹ 10,12,524/- in revenue account assessable under the head 'income from other sources', the assessee claimed deduction under section 57(iii) of the Act amounting to ₹ 11,56,764/- before the Tribunal by filing appeal. The Tribunal vide order dated 15.10.2008, Annexure A.3 relying .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as exigible to tax under the head 'income from other sources'. Once that was so, any expenses incurred by the assessee for earning the said income would fall under Section 57(iii) of the Act. Accordingly, amount of ₹ 11,56,764/- which were the expenses incurred by the assessee for earning the interest under the head 'income from other sources' was rightly allowed by the Tribunal. The relevant findings recorded by the Tribunal read thus:- 10. In our considered opinion, the d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

this point we may note that the interest income of FDRs in relation to the letters of credit obtained for import of capital goods stands capitalized i.e. it has been reduced from the capital cost by the CIT(A). The interest income remaining relates to the imports on revenue account alone which is not disputed by the Department. 11.The observation of the CIT(A) in para 12 to the effect that 'the interest expenses in the case of the assessee has not been expended for the purchase of earning t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version