Case Law Details
Mini Muthoottu Credit India (P) Ltd. Vs CIT (Kerala High Court)
Interest on Loan for purchasing agricultural Land & earning agricultural income not allowable U/s. 36(iii)
In a recent ruling, the Kerala High Court delivered a significant judgment in the case of Mini Muthoottu Credit India (P) Ltd. Vs CIT concerning the deductibility of interest on loans utilized for purchasing agricultural land. The decision sheds light on the interpretation of relevant provisions of the Income Tax Act and their application in cases involving agricultural income. Let’s delve into the details of this noteworthy verdict.
Background of the Case: Mini Muthoottu Credit India (P) Ltd., engaged in asset management services, declared its income for the assessment year 2012-13. However, the assessing officer disallowed a portion of the interest paid on long-term borrowings, contending that the loan amount was used to acquire agricultural land.
Legal Proceedings: The appellant appealed to the Commissioner of Income Tax (Appeals), who initially ruled in its favor. However, the Income Tax Appellate Tribunal (ITAT) overturned the decision, upholding the disallowance of interest expense.
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