Rate of Interest is Irrelevant for disallowing interest U/s. 57(iii)

Shri Mahendra Singh Meel Vs. ITO (ITAT Jaipur) The issue under consideration is whether the interest expense can be disallowed u/s 57(iii) on the ground that rate of interest paid was higher that rate of interest received in own case? ITAT states that Section 57(iii) requires that the expenditure must be laid out or expended wholly and exclusively for the purpose of making or earning income. It is the purpose of the expenditure that is relevant in determining the applicability of s. 57(iii) and that purpose must be making or earning of income. S. 57(iii) does not require that this purpose must...