Tax Deduction Denied: Mistake in Investment Choice u/s 57(iii) of Income Tax Act Leads to Disallowed Interest Offset.

Rectification of mistake - Deduction u/s. 57(iii) - set off of interest paid with interest income - The funds which ought to have been used for investment in CGDA Scheme is the amount received on sale consideration of capital asset. Because the assessee has mis-used the sale consideration to invest in mutual fund, the self-made mistake cannot be a reason to set off the interest paid to HSBC Bank out of interest earned from CGDA Scheme. Therefore, in our opinion, there is no merit in the arguments of the assessee that interest paid to HSBC Bank is to be allowed as a deduction u/s. 57(iii) of the Act out of interest earned from CGDA Scheme. - AT .....

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