2018 (2) TMI 297

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....2. That the learned CIT (Appeals) has erred in confirming the disallowance on account of interest of Rs. 2,29,353.00. 3. That the learned CIT (Appeals) has erred in confirming the disallowance on account of interest deducted in computation of income of Rs. 1,22,512.00. 4. That the addition / disallowances confirmed by learned CIT (Appeal) are arbitrary and unlawful." 2. At the outset, Learned A. R. stated that he will not be pressing ground No. 1 therefore, the same is dismissed as not pressed. 3. As regards ground No. 2 regarding disallowance of interest of Rs. 2,29,353/-, Learned A. R. submitted that assessee had included the income of his minor daughter in his computation of income and the interest paid by her on ....

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.... appreciate that the assessee had raised unsecured loans which were not introduced into the business of the assessee but these funds were utilized by the assessee for earning interest income which was offered to tax as income from other sources and therefore, the interest paid was deductible from income from other sources as the funds obtained through loans were utilized for earning interest income. Learned A. R. in this respect invited out attention to the computation of income and stated that the gross interest income amounted to Rs. 20,87,296/- which was much more than the interest paid. It was further submitted that the loan was taken from one party M/s Bhartiya Agency and during the year under consideration the assessee had paid intere....

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....book, had claimed the deduction on account of interest paid by minor daughter against the income from other sources. The income from other sources is taxable under the provisions of I.T. Act and these provisions are contained in section 56 onwards. The deductions permitted to be made from the income u/s 56 are contained in section 57 of the Act. The deductions as contained in section 57 are specific and apply to various income under the head income from other sources. Clause (iii) of section 57 states that any other expenditure laid out or expended wholly and exclusively for the purpose of making or earning such income will be allowed as deduction against income from other sources. The assessee had not been able to substantiate that the int....