Income tax reassessment reopening after four years on investigation tip, without s.147 proviso disclosure failure, struck down as borrowed satisfactio...
ITAT allowed the assessee's appeal, holding that proportionate expenditure is deductible u/s 57(iii) against interest income taxed under the head "income from other sources" u/s 56. It observed that the Revenue had not disputed the genuineness of expenses or the audited books u/s 44AB, and that denial of deduction solely for lack of one-to-one nexus was contrary to law. For a co-operative credit society, administrative and financial expenses are inherently linked to earning interest from deployment of business funds. The disallowance was therefore set aside and deduction u/s 57 was directed to be granted.
ITAT allowed the assessee's appeal, holding that proportionate expenditure is deductible u/s 57(iii) against interest income taxed under the head "income from other sources" u/s 56. It observed that the Revenue had not disputed the genuineness of expenses or the audited books u/s 44AB, and that denial of deduction solely for lack of one-to-one nexus was contrary to law. For a co-operative credit society, administrative and financial expenses are inherently linked to earning interest from deployment of business funds. The disallowance was therefore set aside and deduction u/s 57 was directed to be granted.
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