TMI Blog2018 (2) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... t any other expenditure laid out or expended wholly and exclusively for the purpose of making or earning such income will be allowed as deduction against income from other sources. The assessee had not been able to substantiate that the interest paid by his minor daughter was for earning of any income as defined in section 56 as income from other sources. Rather the assessee has made out a case that the interest was paid on borrowed funds which were utilized for construction of guest house and which too had not become operational. Therefore, we find that authorities below have rightly disallowed the claim. As regards disallowance of interest which the assessee had paid for earning of income under the head income from other sources, we fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance on account of interest of ₹ 2,29,353.00. 3. That the learned CIT (Appeals) has erred in confirming the disallowance on account of interest deducted in computation of income of ₹ 1,22,512.00. 4. That the addition / disallowances confirmed by learned CIT (Appeal) are arbitrary and unlawful. 2. At the outset, Learned A. R. stated that he will not be pressing ground No. 1 therefore, the same is dismissed as not pressed. 3. As regards ground No. 2 regarding disallowance of interest of ₹ 2,29,353/-, Learned A. R. submitted that assessee had included the income of his minor daughter in his computation of income and the interest paid by her on loans taken for construction of guest house was claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loans which were not introduced into the business of the assessee but these funds were utilized by the assessee for earning interest income which was offered to tax as income from other sources and therefore, the interest paid was deductible from income from other sources as the funds obtained through loans were utilized for earning interest income. Learned A. R. in this respect invited out attention to the computation of income and stated that the gross interest income amounted to ₹ 20,87,296/- which was much more than the interest paid. It was further submitted that the loan was taken from one party M/s Bhartiya Agency and during the year under consideration the assessee had paid interest on such loan amounting to ₹ 1,20,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of interest paid by minor daughter against the income from other sources. The income from other sources is taxable under the provisions of I.T. Act and these provisions are contained in section 56 onwards. The deductions permitted to be made from the income u/s 56 are contained in section 57 of the Act. The deductions as contained in section 57 are specific and apply to various income under the head income from other sources. Clause (iii) of section 57 states that any other expenditure laid out or expended wholly and exclusively for the purpose of making or earning such income will be allowed as deduction against income from other sources. The assessee had not been able to substantiate that the interest paid by his minor daughte ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
