Interest Expenditure U/s 57 Allowed — Nexus Established through Computation

Advertisement Amarsingh N. Thakur Vs ACIT (ITAT Mumbai) The assessee, a real estate developer, earned interest income from a partnership firm and a private limited company and claimed deduction of corresponding interest expenditure of ₹50.91 lakh u/s 57 against income offered under the head “Income from Other Sources.” The AO disallowed the claim alleging absence of direct nexus between borrowings and interest income, which was upheld by CIT(A). ITAT observed that the assessee had capitalised a substantial portion of interest expenditure and claimed deduction only to the extent relata...