TMI Blog2018 (6) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... same - Hence dismissed. - I.T.A. No.55/Ahd/2017 - - - Dated:- 29-5-2018 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER For The Appellant : Written Submission For The Respondent : Shri V. K. Singh, Sr. D.R. ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the assessee against the appellate order of the Commissioner of Income Tax(Appeals)-6, Ahmedabad [CIT(A) in short] vide appeal no.CIT(A)- 6/285/15-16 dated 27/10/2016 arising in the assessment order passed under s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) dated 28/01/2016 relevant to Assessment Year (AY) 2013-14. 2. The grounds raised by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank of Hyderabad. The Assessee declared such interest income under the head income from the business and profession in the income tax return, which was revised during the assessment proceedings and accordingly, same was declared under the head income from other sources. The assessee in his revised computation of income claimed interest expenses of ₹ 2,20,202/- and depreciation allowance of ₹ 36,085/- against the such interest income. However, the AO disallowed the interest expenses and depreciation allowance claimed by the assessee against interest income on the ground that the assessee cannot claim such deduction without filing the revised return of income. Thus, the AO disallowed the interest expenses of ₹ 2,20,202/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 2,20,202/- and depreciation of ₹ 36,085/-. The appellant claimed interest payment on overdraft of ₹ 2,20,202/-against interest income from FD however the appellant utilized the overdraft for personal purpose. Thus the interest on overdraft was not at all used for earning interest income earned out of FD. Therefore it cannot be said that the interest expenses was incurred for earning interest income from the FD deposit. As per the provisions of section 57(3) expenditure laid out or incurred wholly for the purpose of making or earning such income and not being in the nature of capital and personal expenditure is only allowed. Since the interest expenditure on overdraft does not fall into this category therefore the AO is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd use some money out of such premature deposits and make fixed deposit for the remaining amount. Example: On 01.04.2012 fixed deposit of ₹ 5,00,000 made with bank for 12 months. On 15.06.2012, the depositor needs 50,000. Then he has to premature the fixed deposit of ₹ 5,00,000, take out 50,000 from the premature amount and make new deposit of ₹ 4,50,000. When on 31.07.2012 he has 30,000 from salary income then again he has to make the deposit of 30,000. When on 31.08.2012, he needs 15,000 then again the above procedure need to be followed and so on Banks charge penalty for prematurity of fixed deposits suffering extra monetary loss to the depositors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest expenses on overdraft facility should be allowed as deduction against the interest income earned on the fixed deposits as discussed above. 8. It is undisputed facts that the assessee has earned interest income on fixed deposits, which is chargeable to tax under the head income from other sources u/s 56 of the Act. The assessee against such income can claim the deduction of the expenses as specified under section 57 of the Act, which reads as under: Deductions. 50 57. The income chargeable under the head Income from other sources shall be computed after making the following deductions, namely :- ( i) XXXXXXXXXXXX 54[(ia) XXXXXXXXXXXXX ( ii) XXXXXXXXXXXXXXXXX 58[(iia)XXXXXXXXXXXXXXXXXXXXX ..... X X X X Extracts X X X X X X X X Extracts X X X X
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