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Netting of interest paid on borrowed fund against interest income earned on same fund is permitted
Case Law Details
- Case Name
- Vodafone South Ltd. (Formerly known as M/s Vodafone South Essar and Hutchison Essar South Ltd.) Vs CIT (Delhi High Court)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Courts
- All High Courts, Delhi High Court
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Brief of the Case
Delhi High Court held In the case of Vodafone South Ltd. vs. CIT that the netting of the interest paid on the borrowed sum against the interest income earned is allowed. There was a direct nexus between the earning of interest on the loan advanced by the Assessee and payment of interest to the bank. Since the interest paid to bank was in the nature of an expenditure wholly and exclusively incurred for the purpose of earning the interest income, it is permitted to be netted against such ‘income from other sources’ in terms of Section 57 (iii).
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