2004 (11) TMI 77

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..... e Commissioner of Income-tax (Appeals) allowed expenses at the rate of 1 per cent. of the interest income. In the second appeal the Income-tax Appellate Tribunal has enhanced it from 1 per cent. to 5 per cent - If a particular expenditure falls strictly under the clause of section 57 of the Act only then it is liable to be allowed as expenses otherwise not. The expenditure incurred on maintenance .....

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..... ome from other sources?" Briefly stated the facts giving rise to the present reference are as follows: The respondent is a co-operative sugar mill. During the assessment year in question it did not have any business activity as the manufacturing activity did not start in this year. It was in the process of erection/construction. The funds which it received were invested and it had interest inc .....

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..... s". If a particular expenditure falls strictly under the clause of section 57 of the Act only then it is liable to be allowed as expenses otherwise not. The expenditure incurred on maintenance of the office and for planning of construction does not fall under any of the clauses of section 57 of the Act and therefore the assessee could not have been allowed the expenses as deduction from the intere .....

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