https://www.taxtmi.com/caselaws?id=118379 The Tribunal held that interest payment on borrowed capital invested in a partnership firm, where the share of profits is exempt under Section 10(2A), cannot be claimed as a deduction under the head "Income from profits and gains of business/profession." It emphasized that expenditure must be related to the income it aims to earn and cannot be allowed under a different head. Section 14A can disallow interest payment as it was incurred to earn exempt income. Losses from the firm cannot be set off or carried forward by the partner, as only the firm can do so. The matter was remanded to the Assessing Officer for further consideration. en-us Fri, 31 Mar 2006 00:00:00 +0530 Sat, 30 Jun 2012 13:01:54 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=118379 The Tribunal held that interest payment on borrowed capital invested in a partnership firm, where the share of profits is exempt under Section 10(2A), cannot be claimed as a deduction under the head "Income from profits and gains of business/profession." It emphasized that expenditure must be related to the income it aims to earn and cannot be allowed under a different head. Section 14A can disallow interest payment as it was incurred to earn exempt income. Losses from the firm cannot be set off or carried forward by the partner, as only the firm can do so. The matter was remanded to the Assessing Officer for further consideration. Case-Laws Income Tax Fri, 31 Mar 2006 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=118379