Law:

Section:

JUDGMENT T.U. Mehta, J. -The question which is involved in this reference is whether the applicant-assessee is entitled to claim deduction as regards the payment of interest to the extent of Rs. 10,279 against the "income from other sources" under clause (iii) of section 57 of the Income-tax Act, 1961, which is hereinafter referred to as "the Act". The facts of the case show that the applicant-assessee derives income from other sources in the shape of interest and dividends. The assessment with which we are concerned in this reference is for the year 1966-67. During the course of the assessment, it was found that the applicant-assessee had borrowed loan from the Estate of Harivallabhdas Kalidas. During the accounting period the amount of this loan was of Rs. 5,00,055. Interest paid on this amount during the accounting period was Rs. 26,986. The case of the assessee was that the entire interest amount of Rs. 26,986 should be allowed as permissible deduction under clause (iii) of section 57 of the Act which says that while computing the chargeable income under the head "income from other souces" any expenditure, not being in the nature of capital expenditure, laid out or expended wholly or exclusively for the purpose of making or earning such income, should be deducted. The Income-tax Officer, who carried out the assessment worked out, on proportionate basis with reference to withdrawals, and the balance available, the interest amount of Rs. 10,279 which alone could be considered for the purpose of deduction in question. The dispute, therefore, is confined only to this amount. It is found that this interest was paid by the assessee on the loans which were raised for the purpose of meeting her tax liabilities such as income-tax and wealth-tax as well as for the purpose of making annuity deposit. But this deduction was not allowed by the Income-tax Officer as, in his opinion, the case did not fall within clause (iii) of section 57 in view of the decision given by the High Court of Bombay in Bai Bhuriben Lallubhai v. Commissioner of Income-tax [1956] 29 ITR 543 (Bom.).Being aggrieved by this decision, the applicant-assessee approached the Appellate Assistant…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492