TMI Blog2023 (7) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... ii), all the expenditure laid out or expended wholly and exclusively for the purpose of making or earning such income has to be allowed as deduction. We find that employee remuneration, salary, legal expenses, board meeting expenses, Director sitting fees cannot be attributable to the interest earned from the fixed deposits. Reliance is being placed on the judgment of CIT Vs. V.P. Gopinathan [ 2001 (2) TMI 10 - SUPREME COURT] wherein held that there should be a nexus between the expenditure incurred and the income earned. Hence, the facts and circumstances of the instant case, we hereby affirm the order of the ld. CIT(A). Appeal of the assessee is dismissed. - ITA No. 1239/Del/2019 - - - Dated:- 21-4-2023 - Sh. C. M. Garg, Judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been selected for limited scrutiny for the following reasons: I. Mismatch in profit before tax as per P L account and schedule BP of return (Verification of MAT liability); II. Mismatch between income/ receipt credited to P L account considered under other heads of income and income from head of income other than business/profession. 5. The ld. AR of the assessee contended that the Assessing Officer had exceeded the scope of scrutiny provided under the limited scrutiny. 6. We find that during the assessment proceedings u/s 143(3) of the Act, addition of Rs. 46,76,255/- to the returned income was made by disallowing expenses u/s 57 (iii) of the Act. The addition has been made after examining various heads of income and determini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Legal and professional fees- ROC 44,890/- Board Meeting expenses-CEO and CFO travel expenses 77,416/- Director sitting fees 2,60,000/- 46,76,255/- Income from other sources chargeable to tax 56,46,933/- 10. Out of the interest on FDs of Rs. 1.03 Cr., the assessee has claimed expenses of Rs. 46.76 lacs which the AO disallowed and confirmed by the ld. CIT(A). 11. Aggrieved, the assessee filed appeal before us. 12. The ld. AR argued that the company was incorporated in Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of business or profession. (D) Capital gains. (E) Income from other sources 16. The income of the assessee rightly falls under the head Income from other sources . 17. Further, we have perused the provisions of Section 57 of the I.T. Act which reads as under: Deductions. 57. The income chargeable under the head Income from other sources shall be computed after making the following deductions, namely : (i) in the case of [dividends], or interest on securities, any reasonable sum paid by way of commission or remuneration to a banker or any other person for the purpose of realising such dividend or interest on behalf of the assessee ; (ia) in the case of income of the nature referred to in sub-clause (x) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified under clause (23D) of section 10 or income in respect of units from a specified company defined in the Explanation to clause (35) of section 10, other than deduction on account of interest expense, and in any previous year such deduction shall not exceed twenty per cent of the dividend income, or income in respect of such units, included in the total income for that year, without deduction under this section.] 18. As per the provisions of Section 57(iii), all the expenditure laid out or expended wholly and exclusively for the purpose of making or earning such income has to be allowed as deduction. 19. We find that employee remuneration, salary, legal expenses, board meeting expenses, Director sitting fees cannot be attrib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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