TMI Blog2016 (1) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... he connection between the interest paid on loan and FDRs. The only difficulty made out by the Assessing Officer to deny deduction claimed under section 57(iii) was that in view of the voluminous details, interest paid to ICICI and IDBI for the funds utilized for the FDRs, cannot be exactly determined. Therefore, considered in this light 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 allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved as narrated in the appeal may be noticed. The assessee declared total income of ₹ 1,10,860/- in its return of 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 incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was 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 documents and the material on record clearly establishe that the assessee has incurred interest on loans from ICICI and IDBI bank which have been utilized for the purchase of the FDRs which have yielded the interest income in questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is evident from para 2.4 of the assessment order, the Assessing Officer has not negated the connection between the interest paid on loan and FDRs. The only difficulty made out by the Assessing Officer to deny deduction claimed under section 57(iii) was that in view of the voluminous details, interest paid to ICICI and IDBI for the funds utilized for the FDRs, cannot be exactly determined. Therefore, considered in this light 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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