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TMI Blog2021 (2) TMI 1383X X X X Extracts X X X X X X X X Extracts X X X X ..... Provisions of section 57(iii) of the Act clearly lays down that while computing the income chargeable under the head income from other source , any expenditure other than capital expenditure expended wholly and exclusively for the purpose of earning such income shall be allowable as deduction. Therefore, when the unutilised borrowed interest-bearing funds are parked in the bank as fixed deposit the corresponding interest expenditure incurred shall be allowable as deduction by virtue of section 57(iii) - Hence, we hereby direct the Ld. AO to verify whether the assessee has parked the unutilised borrowed funds in the bank account as fixed deposit and if so, grant deduction in accordance with section 57(iii) of the Act. Assessee has deposited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d four grounds in its appeal with respect to its appeal in ITA No. 1264/H/2018 for the AY 2013-14, however and the crux of the issue is that: - 1. The Ld. CIT (A) has erred in confirming the order of the Ld. AO who had disallowed the claim of deduction towards interest payable of Rs. 3,21,430/- against the interest earned for Rs. 12,10,609/- on short term deposits on the ground that the deposits were made from surplus funds. 2. The Ld. CIT (A) has erred in confirming the order of the ld. AO who had denied the claim of deduction towards interest payable on borrowed funds while computing the taxable interest income earned by the assessee on the fixed deposits made from the borrowed funds. 4. The brief facts of the case are that the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly and exclusively for the purpose of earning such income shall be allowable as deduction. Therefore, when the unutilised borrowed interest-bearing funds are parked in the bank as fixed deposit the corresponding interest expenditure incurred shall be allowable as deduction by virtue of section 57(iii) of the Act. Hence, We hereby direct the Ld. AO to verify whether the assessee has parked the unutilised borrowed funds in the bank account as fixed deposit and if so, grant deduction in accordance with section 57(iii) of the Act. Accordingly, the concise Ground of the appeal in ITA No. 1263/H/2018 for the AY 2012-13 and the concise Ground No.2 of the appeal in ITA No. 1264/H/2018 for the AY 2013-14 are disposed off. 6. With respect to the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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