TaxTMI 
TaxTMI 
2020 (12) TMI 68
X X X X Extracts X X X X
X X X X Extracts X X X X
....ficer - 27(2)(3), Mumbai (hereinafter referred to as ld. AO). 2. The first issue to be decided is with regard to disallowance of interest made u/s.57(iii) of the Act in the sum of Rs. 2,79,594/-. The interconnected issue involved thereon is disallowance of brokerage of Rs. 1,00,000/- on borrowed loan. 3. We have heard rival submissions and perused the materials available on record. We find that assessee is an individual deriving business income and income from other sources. The assessee has shown interest income of Rs. 22,47,090/- against which interest and brokerage expenditure of Rs. 18,55,020/- was claimed as deduction. We find that assessee had made borrowings from parties @15% per annum and had invested the same in the partnership f....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is placed on the decision of Hon'ble Supreme Court in the case of CIT vs. Rajendra Prasad Moody reported in 115 ITR 519 wherein it was held as under:- "What section 57 (iii) requires is that the expenditure must be laid out or expended wholly and exclusively for the purpose of making or earning income. It is the purpose of the expenditure that, is relevant in determining the applicability of section 57(iii) and that purpose must be making or earning of income. Section 57(iii) does not require that this purpose must be fulfilled in order to qualify the expenditure for deduction. It does not say that the expenditure shall be deductible only if any income is made or earned. There is in fact nothing in the language of section 57(iii) to sugg....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s squarely allowable as deduction. We find that the ld CIT(A) had deleted Rs. 73,392/- and sustained an adhoc disallowance on account of brokerage to the tune of Rs. 1,00,000/-. We direct the ld. AO to allow deduction towards brokerage for the remaining sum of Rs. 1,00,000/-. 3.3. Accordingly, ground Nos. 1 & 2 raised by the assessee are partly allowed. 4. The last issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in upholding the addition made on account of annual value of house property in respect of property situated in a small village of Kutch district @20,000/- in the facts and circumstances of the case. 4.1. We have heard rival submissions and perused the materials available on record. We find that th....