https://www.taxtmi.com/caselaws?id=450990 ITAT Ahmedabad allowed the assessee's appeal against disallowance of interest expenses under section 57(iii). The AO had disallowed excess interest expense where the assessee charged 12% on loans given but borrowed at 6-10%, creating a differential loss. The Tribunal held that section 57(iii) only requires expenditure to be incurred wholly and exclusively for earning income from other sources, with nexus being the sole criterion, not quantum. The AO's interpretation that expenses are allowable only when profit is earned was incorrect, as the provision requires expenditure for the purpose of earning income, not actual profit generation. en-us Fri, 15 Mar 2024 00:00:00 +0530 Mon, 18 Mar 2024 12:41:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=450990 ITAT Ahmedabad allowed the assessee's appeal against disallowance of interest expenses under section 57(iii). The AO had disallowed excess interest expense where the assessee charged 12% on loans given but borrowed at 6-10%, creating a differential loss. The Tribunal held that section 57(iii) only requires expenditure to be incurred wholly and exclusively for earning income from other sources, with nexus being the sole criterion, not quantum. The AO's interpretation that expenses are allowable only when profit is earned was incorrect, as the provision requires expenditure for the purpose of earning income, not actual profit generation. Case-Laws Income Tax Fri, 15 Mar 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=450990