INCOME TAX ACT, 1961

Section 57

Income from other sources - Deduction under section 57(iii) - Interest from savings bank a/c, Interest on FDR, Interest from parties and rent of land -

Assessee declared total income which comprises of interest from savings bank a/c, Interest on FDR, Interest from parties and rent of land. In the computation of income, the assessee claimed interest expenditure paid in respect of Overdraft facility taken from Bank. AO in assessment order passed under section 143(3) disallowed the deduction of interest under section 57(iii) on the ground that assessee failed to establish that expenditure was incurred for earning interest income. CIT(A) confirmed the disallowance made by AO. Held: There was no dispute that in return of income assessee had shown entire income as income from other sources which includes interest from saving bank a/c, interest from FDR and interest from parties. An identical issue was also arisen for assessment year 2013-14 and AO had allowed the claim of interest expenditure to extent of interest income received from various parties. Thus it appeared that interest received by assessee for assessment year 2013-14 was accepted by AO and corresponding interest was also allowed by AO. Assessee challenged the said action of AO restricting the claim of deduction on account of interest expenditure to the interest income. However, CIT(A) while passing the order had confirmed the action of the AO. Claim of interest expenditure of assessee to the interest income was allowed

REFERRED :

FAVOUR : Partly in assessee's favour

A.Y. :

SUBSCRIBE FOR FULL CONTENT