https://www.taxtmi.com/caselaws?id=22372 Interest charged on an unpaid interest liability of an earlier year is not deductible under section 57(iii) while computing income from other sources, because the expenditure was not laid out wholly and exclusively for earning that income. The prior deduction of interest on the borrowed amount had already been allowed, and the later claim arose only from default in discharging the earlier interest liability, not from the borrowing used to generate income. Applying the principle recognised in the earlier Supreme Court authority on compound interest, the Gujarat HC held that such additional interest is not allowable as a deduction and answered the question in favour of the Revenue. en-us Thu, 20 Jun 1991 00:00:00 +0530 Wed, 09 Dec 2009 15:38:04 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=22372 Interest charged on an unpaid interest liability of an earlier year is not deductible under section 57(iii) while computing income from other sources, because the expenditure was not laid out wholly and exclusively for earning that income. The prior deduction of interest on the borrowed amount had already been allowed, and the later claim arose only from default in discharging the earlier interest liability, not from the borrowing used to generate income. Applying the principle recognised in the earlier Supreme Court authority on compound interest, the Gujarat HC held that such additional interest is not allowable as a deduction and answered the question in favour of the Revenue. Case-Laws Income Tax Thu, 20 Jun 1991 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=22372