Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Income Tax Act. 1961 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Income Tax Act, 1961 (43 of 1961) |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Reference Answered |
Headnote | Allowable expenditure - Whether interests on monies borrowed for investment in shares is allowable expenditure, when the shares have not yielded any return in the shape of dividend during the relevant assessment year - Interpretation of Sec. 57(iii) of Income-tax Act, 1961. The respondents assessees in the two references are brothers and each of them had borrowed monies for the purpose of making investments in shares of certain companies and during the assessment year 1965-66 for which the relevant accounting year ended on 10th April 1965, each of the two assessees paid interest on the monies borrowed but did not receive any dividend on the shares purchased with those monies. Each of the two assessees made a claim for deduction of the amount of interest paid on the borrowed monies but this claim was negatived by the Income Tax Officer and on appeal by the Appellate Assistant Commissioner on the ground that during the relevant assessment year the shares did not yield any dividend and, therefore, interest paid on the borrowed monies could not be regarded as expenditure laid out or expended wholly and exclusively for the purpose of making or earning income chargeable under the head "Income From Other Source" so as to be allowable as a permissible deduction under Sec. 57(iii). The Tribunal, however on further appeal, disagreed with the view taken by the Taxing Authorities and upheld the claim of each of the two assessees for deduction under Sec. 57(iii). |
Judge | Honble Mr. Justice P.N. Bhagwati |
Neutral Citation | 1978 INSC 193 |
Petitioner | Commissioner Of Income Tax, West Bengal Iii, Calcutta |
Respondent | Rajendra Prasad Moody, Calcutta Etc. |
SCR | [1979] 1 S.C.R. 1047 |
Judgement Date | 1978-09-04 |
Case Number | 1 and 2 |
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