DR. SHUVO DUTTA,KOLKATA vs. DCIT, CIR-55, KOLKATA, KOLKATA

The assessee in the present case is an individual, who is a Medical Practitioner. The return of income for the year under consideration was filed by him on 12.09.2009 declaring total income of Rs.33,14,470/-. In the said return, deduction of Rs.2,36,906/- was claimed by the assessee on account of interest paid on loan against the income from property situated at Golf Towers and/or Jodhpur Park. Since the relevant loan, on which such interest was paid, had been taken by the assessee for the property situated at Queen’s Park, the deduction claimed by the assessee ./2015 Assessment year: 2009-2010 Page 2 of 3 on account of interest against income from property situated at Golf Towers and/or Jodhpur Park was disallowed by the Assessing Officer.

The disallowance made by the Assessing Officer on account of interest was challenged by the assessee in the appeal filed before the ld. CIT(Appeals). During the course of appellate proceedings before the ld. CIT(Appeals), an alternative plea was raised by the assessee by submitting that the relevant loan having been taken against Fixed Deposit kept with Bank, interest paid thereon should be allowed as deduction against the interest income earned on the Fixed Deposit. This alternative claim of the assessee, however, was not found acceptable by the ld. CIT(Appeals) keeping in view section 57(iii) which specifically provides that in order to claim deduction against the income chargeable to tax under the head “ income from other sources”, expenditure must be laid down or expended wholly and exclusively for the purpose of making or earning of income. Since the expenditure on interest in question was incurred by the assessee for purchase of property and not for earning of interest income from Fixed Deposit, the disallowance made by the Assessing Officer on account of such interest was confirmed by the ld. CIT(Appeals). Aggrieved by the order of the ld. CIT(Appeals), the assesee has preferred this appeal before the Tribunal.

I have heard the arguments of both the sides and also perused the relevant material available on record. Although the ld. counsel for the assessee has contended that deduction on account of interest in question is to be allowed against interest income earned by the assessee on FDR keeping in view the facts and circumstances of the case, I find that the provisions of section 57(iii) are very specific in this regard and as rightly held by the ld. CIT(Appeals), the deduction against the income chargeable to tax under the head “income from other sources” can be allowed only in respect of expenditure which is laid down or expended wholly and exclusively for the purpose of making or earning of such income. In the present case, the interest expenditure was incurred by the assessee for ./2015 Assessment year: 2009-2010 Page 3 of 3 purchase of house property and not for earning of interest on FDs and the same, therefore, cannot be allowed as deduction under section 57(iii). I, therefore, find no infirmity in the impugned order of the ld. CIT(Appeals) confirming the disallowance made by the Assessing Officer on account of interest and upholding the same, I dismiss this appeal filed by the assessee.