https://www.taxtmi.com/caselaws?id=758042 The ITAT Mumbai allowed the assessee's appeal regarding disallowance of brokerage expenses under section 57(iii). The AO had proportionately disallowed expenses based on the ratio of principal and interest received from a builder. The tribunal held that once expenditure is established as wholly and exclusively incurred for earning income, it cannot be partly disallowed on estimation basis. The assessee engaged brokers to recover both principal and interest amounts, offering the interest component as income and claiming the entire brokerage expense as deduction. The tribunal emphasized that connection between expenditure and income earning must exist, and the expenditure's purpose should be for earning income, regardless of profitability. en-us Fri, 30 Aug 2024 00:00:00 +0530 Fri, 06 Sep 2024 08:21:11 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=758042 The ITAT Mumbai allowed the assessee's appeal regarding disallowance of brokerage expenses under section 57(iii). The AO had proportionately disallowed expenses based on the ratio of principal and interest received from a builder. The tribunal held that once expenditure is established as wholly and exclusively incurred for earning income, it cannot be partly disallowed on estimation basis. The assessee engaged brokers to recover both principal and interest amounts, offering the interest component as income and claiming the entire brokerage expense as deduction. The tribunal emphasized that connection between expenditure and income earning must exist, and the expenditure's purpose should be for earning income, regardless of profitability. Case-Laws Income Tax Fri, 30 Aug 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=758042