1984 (1) TMI 30 - HC - Income Tax

Summary

The High Court of Karnataka ruled in favor of the assessee, allowing a deduction of Rs. 10,733 under section 57(iii) of the Income Tax Act, 1961. The deduction was claimed for interest paid in excess to a bank upon premature withdrawal of a fixed deposit for investment in shares. The court held that the interest repaid to the bank qualifies as an allowable expense under section 57(iii) as it was paid for the purpose of investment in shares. The court distinguished a previous case where premature withdrawal of a fixed deposit was not for the purpose of earning income.