TaxTMI 
TaxTMI 
2010 (8) TMI 1077
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....ead as under:- "Whether on the facts and circumstances of the case, Ld. C.I.T.(A) was right in allowing the benefit of netting of interest paid by the assessee, for the purpose of borrowing for investment in FDRs for business purposes against the interest income on such FDRs, which fall under the Head 'Income from other sources." 3. The Assessee in the present case is 100% export oriented unit and is engaged in the business of manufacturing and export of gold jewellery in Noida, Special Economic Zone (SEZ). The assessee is entitled for exemption u/s 10A for the years under consideration. 3.1 Since the issue involved in all these appeals are identical and the basis of making addition is also identical, therefore, we will discuss the fact....
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....arious judicial pronouncements. It was further noticed that total expenditure on bank interest incurred by the assessee during the year was ₹ 28,35,257/- whereas only a sum of ₹ 18,95,966/- was debited to the profit and loss account and thus assessee after netting of has arrived at interest received from FDRs amounting to ₹ 9,39,771/- and the said income was considered to have escaped assessment and for that reason the assessment was reopened. In this manner a sum of ₹ 8,79,179/- being interest earned on FDRs has been excluded from the income form business or profession and has been assessed under the head income from other sources. Thus income has been assessed at a sum of ₹ 8,79,179/- against the NIL income. ....
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....usiness. In fact, the Ld. C.I.T.(A) has held that there was a close nexus between the loans taken for the purpose of giving out bank guarantees and the loans form the banks were on the basis of fixed deposits given as margin money. Consequently, the interest paid to the banks should be allowed to be netted against the interest received from the banks. It is noticed that the finding of the Ld. C.I.T.(A) is in line with the decision of the honourable jurisdictional High Court referred to supra, and consequently the findings of the Ld. C.I.T.(A) on this issue stands upheld." In view of the above, since the benefit of decision of the jurisdictional ITAT on the identical facts in the case of the appellant is already available, I hold that the ....
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....ent of expenditure which has been laid out or expended wholly or exclusively for the purpose of making or earning such income. He submitted that though Ld. Commissioner of Income Tax (Appeals) has held that character of income earned by the assessee from FDR is of income form other sources, but he has not given any finding that the interest which has been sought to be netted of by the assessee has been laid out or expended by the assessee wholly or exclusively for the purpose of making or earning that income. He contended that no doubt the tribunal in assessee's own case for A.Y. 2003-04 has held that such netting is permissible, but the amount which has to be netted of has to be quantified and which exercise has not been done by the Ld. Co....