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| The Tax Publishers2020 TaxPub(DT) 2037 (Mum-Trib) INCOME TAX ACT, 1961
Section 57
Since there was no direct nexus of these expenditure vis-a-vis interest income earned by the assessee and there was no material on record which would suggest any nexus of expenditure vis-a-vis interest income, therefore, expenditure claimed would not be allowable to the assessee.
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Income from other sources - Deduction under section 57(iii) - Assessee failed to provide any proof to AO to prove that expenses claimed were incurred for earning interest on fixed deposits -
Issue arose for consideration as to whether CIT(A) erred in allowing the appeal of assessee on account of disallowance of expenditure under section 57(iii) ignoring the fact that during the course of assessment proceedings the assessee failed to provide any proof to AO to prove that the expenses claimed were incurred for earning interest on fixed deposits under the head Income from other sources. Held:Management/trusteeship fees and other expenses which mainly consist of audit fees, professional fees, etc., were directed towards the prime activity, i.e., venture capital investment, the income from which has been assessed under the head Capital Gains. Therefore, there was no direct nexus of these expenditure vis-a-vis interest income earned by the assessee. Since there was no material on record which would suggest any nexus of expenditure vis-a-vis interest income, the expenditure thus claimed would not be allowable to the assessee.
Distinguished:CIT v. Richardson and Cruddas Ltd. (1993) 202 ITR 350 (Cal) : 1993 TaxPub(DT) 0069 (Cal-HC) Asstt. CIT v. Small is Beautiful (ITA Nos. 1004-05/Hyd/2012, dated 4-7-2013) : 2013 TaxPub(DT) 2347 (Hyd-Trib)
REFERRED :
FAVOUR : Against the assessee
A.Y. : 2012-13
IN THE ITAT, MUMBAI BENCH
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