Interest paid to creditor deductible from FDs interest as it was made out of surplus arose from restructuring process

INCOME TAX : The purpose of expenditure is relevant in determining the applicability of section 57(iii) and purpose must be making and earning income Where, as per scheme of arrangement approved by High Court, assessee was utilized as special purpose vehicle for purpose of distribution of surplus after clearance of debts of a company, since process of settlement was continuing, surplus was deposited as fixed deposit in banks which earned interest,

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