TMI Blog2018 (5) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... iii) and admissible subjected to basic checks under the Act. AO will allow the legal expenses for which the assessee has produced valid bill - With regard to the claim of travel expenses, AO is directed verify the posting of the assessee’s case for putting his appearance/meeting with his advocate and allow the claim after satisfying that there was no personal element involved for claiming the travel expenses. - Decided in favour of assessee for statistical purposes. - I.T.A.No.1244/Mds/2017 - - - Dated:- 20-2-2018 - Shri A. Mohan Alankamony, Accountant Member And Shri Duvvuru RL Reddy, Judicial Member For The Appellant : Shri K. Balasubramanian, Advocate For The Respondent : Shri S. Mohd. Mustafa, JCIT ORDER PER DUVVURU RL REDDY, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 16, Chennai dated 22.03.2017 relevant to the assessment year 2014-15. The only effective ground raised in the appeal of the assessee is that the ld. CIT(A) erred in confirming the disallowance of ₹.43,25,232/- being expenses claimed under section 57(iii) of the Income Tax Act, 1961 [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenditure is attributable primarily towards securing the capital and cannot be said to be incurred wholly and exclusively for the purpose of earning of the income to qualify deduction under section 57(iii) of the Act and accordingly disallowed and brought to tax the entire expenses claimed by the assessee. 3. The assessee carried the matter in appeal before the ld. CIT(A). After considering the submissions of the assessee and facts of the case, the ld. CIT(A) confirmed the disallowance of expenses as not admissible. 4. On being aggrieved, the assessee is in appeal before the Tribunal. By relying on the grounds appeal, the ld. Counsel for the assessee vehemently argued that the ld. CIT(A) went in wrong to hold that the above expenses claimed by the assessee as capital expenditure and also erred in holding that the above expenditure claimed under the head other sources was different from expenditure under the head Business . The ld. CIT(A) failed to note that as per the directions of the Hon ble High Court, the bank paid the interest on the FDs till the FDs are paid to the assessee and prayed to allow the expenses claimed under section 57 of the Act. On the other hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly and exclusively for the purpose of business , whereas, section 57(iii) of the Act provides for deduction only of expenditure incurred wholly and exclusively for the purpose of making or earning such income . Such income refers to income from other sources . The expression for the purpose of business is narrower than the expression for the purpose of making or earning such income . In order that the expenditure may be admissible under section 57(iii) of the Act, it is necessary that the primary motive of incurring such expenses directly to turn income falling under the head income from other sources . That is not so under section 37 which allows deduction of expenditure; incurred wholly and exclusively for the purpose of the business . Under section 57(iii) of the Act, deduction will not be allowed if the expenditure is not incurred for the purpose of earning income falling under the head income from other sources . Had the assessee not approached the Hon ble High Court, he would not have got back the investments along with interest thereon. 5.3 The provisions of the Income-tax Act relating to allowances disclose that the expenditure or outgoing sought to be deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on personal considerations or motives of the assessee, the expenditure incurred in consequence of the exercise of such option cannot be treated as an allowable deduction; (vii) it is not necessary, however, that the expenditure incurred must have been obligatory; it is enough to show that the money was expended not of necessity and with a view to an immediate benefit to the assessee but voluntarily and on the ground of commercial expediency and in order indirectly to facilitate the making or earning of the income; (viii) if, therefore, it is found on application of the principles of ordinary commercial trading that there is some connection, direct or indirect, but not remote, between the expenditure incurred and the income earned, the expenditure must be treated as an allowable deduction; (ix) it would not, however, suffice to establish merely that the expenditure was incurred in order indirectly to facilitate the carrying on of the activity which is the source of the income; and nexus must necessarily be nexus must necessarily be between the expenditure incurred and the income earned; (x) it is not necessary to show that the expenditure was a profitable one or hat in f ..... 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