The ITAT allowed the assessee's appeal and held that the disallowance of interest expenditure claimed as...

The ITAT allowed the assessee's appeal and held that the disallowance of interest expenditure claimed as a deduction against interest income from the partnership firm was not sustainable. The assessee had sourced funds from both interest-bearing loans and non-interest-bearing funds, which were majorly invested in the capital of partnership firms for business purposes. The revenue contended that since the investment did not earn any income except from one firm, the interest paid u/s 36(1)(iii) was not allowable. However, the ITAT observed that the commercial expediency must be considered for allowability u/s 36(1)(iii), and the revenue did not raise any contention in this regard. The ITAT noted that without establishing a one-to-one match, i..... .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X