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TMI Blog2015 (1) TMI 1246X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax Act against interest income of Rs. 16,08,399/- disclosed under the head "Income from other Source". 1.1 On the facts and circumstances of the case an in law the learned Commissioner Of Income Tax (Appeals) erred in ignoring the provisions of Sec57(iii) of the Income Tax Act according to which any expenditure ( not being the nature of capital expenditure or personal expenditure) laid out or expended wholly and exclusively for the purpose of making or earning of such income is allowable as a deduction in computing the income under the head "Income from other Sources". 1.2 On the facts and circumstances of the case an in law the learned Commissioner Of Income Tax (Appeals) erred in failing to appreciate that the facts of Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by rejecting the claim of the assessee u/s 57(iii) of the Act 3. Facts in brief are that the assessee an individual was engaged in the business of trading in plastic granules and derived income from various sources of income such as salary, capital gain and income from other sources. During the year under reference, the assessee filed his return of income on 29.09.2009 declaring an income of Rs. 38,96,730/- under various heads of income. The assessee had shown Rs. 15,99,664/- as income under the head income from other sources which was received on the loans given to various companies and against the said income the assessee claimed deduction u/s 57(iii) of Rs. 3,97,244/- as interest on the money raised for repayment/ advancing loans to oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch showed that the unsecured loans as on 31.03.2009 were at Rs. 2,98,23,849/- and loan & advances were at Rs. 2,05,01,790/- and the corresponding figures of the previous year were 1,70,21,272/- and 1,72,64,952/- respectively. The balance-sheet is filed at page no. 15 of the paper book. The ld AR submitted before us that that the decisions relied on by the AO and CIT(A) were distinguishable and were wrongly applied to the assessee,s case. The ld Counsel for the assessee strongly relied on the decision Seth R Dalmia (1977)110ITR644 (SC), CIT Vs HH Maharani Shri VijayKuerba Sahib of Morvi (1975)100TR67 (Bom).It was agrued that the interest paid constituted the expenses incurred indirectly to earn the interest of Rs. 15,99,664/- on loans advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dr VP (2001) 116 Taxman 489(SC) is distinguishable on facts. In the said case the assessee made an FDR with the bank and against that FDR the assessee raised a bank loan. The Hon'ble Court held that interest on the said loan was not deductible from the amount of bank interest on FDR as there was no provision in law for the same whereas in the instant case the assessee had interest income from money lending to various companies to the tune of Rs. 15,99,664/- and he had also paid interest of Rs. 3,97,244/- on loans taken by the assessee for the purpose of lending/repayments of existing loans. Thus there is direct nexus between the taking loans and lending to others or repaying the loans taken at higher rate. Thus the facts of the assessee cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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