2001 (10) TMI 80

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..... K. BALASUBRAMANYAN J. -At the instance of the Revenue, the following question has been referred for the opinion of this court: "Whether, on the facts and in the circumstances of the case, interest on the borrowal made by the assessee against the fixed deposit made by the assessee with the bank is an allowable deduction under section 57(iii) of the Income-tax Act, 1961?" The relevant assess....

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....come from other sources. On appeal by the assessee, the Commissioner of Income-tax (Appeals) held that it would not be appropriate to ignore the assessee's claim for deduction of Rs.84,654 since the interest was taken away by the bank as consideration for the facilities extended by it to the assessee. On further appeal by the Revenue, the Income-tax Appellate Tribunal held that the interest at the....

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....ein, this court has held that any set off or deduction of any expenditure can only be made in accordance with the provisions of the Income-tax Act and the interest paid on borrowals was not an allowable deduction under section 57 of the Income-tax Act. Thus the question was answered against the assessee and in favour of the Revenue. We also find that the earlier view adopted by this court in CI....