15 February 2010
if a person borrowed some fund for investment in shares and earned some dividend and also paid interest on borrowed fund. can he claim that interest as expenses in other sources.In a judgement, given by supreme court in 1978 CIT v/s Rajinder Moody case, it is given that expenses are allowable. I m confused.
As the dividend is exempt from tax you can not claimed expenses related to dividend under other income. You have given case reference which relates to year 1978 at that time dividend was taxable hence said expenses allowed for deduction.
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