Income From other sources - The Appellate Tribunal addressed the ...

Appellate Tribunal denied interest expense claim u/s 57(iii) as no direct link to income. Expenditure must be "wholly and exclusively" for earning income.

Case Laws     Income Tax

July 1, 2024

Income From other sources - The Appellate Tribunal addressed the disallowance of interest expenses u/s 57(iii) of the Act. The claim was denied due to lack of direct nexus between the interest expenditure and income from other sources. The assessee argued that the borrowed amount was invested in firms where they earned interest income and in immovable properties. The Tribunal noted that u/s 57(iii), expenditure must be incurred "wholly and exclusively" for earning such income. As there was no clear correlation between the expenditure and interest income, the CIT(A) rightly disallowed the interest expenditure. Since none of the expenditure was solely for earning income, it could not be allowed u/s 57(iii). Consequently, the appeal was dismissed.

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