1.   COMMISSIONER OF INCOME-TAX, Vs. M/S TAJ INTERNATIONAL JEWELLERS, INCOME TAX APPEAL NO. 985 OF 2010, DATE OF ORDER : 13.12.2010, HIGH COURT OF DELHI 

If there is a clear nexus between the interest earned on the FDRs and the interest paid on loans utilized for purchase of FDRs and the intimate connection between the receipt and payment of interest stand established. It is not in dispute that the entire money was borrowed with the sole purpose of converting the same into FDRs and that was actually done as well. The interest paid had to be allowed under the provisions of Section 57 (iii) of the Act.

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2.   COMMISSIONER OF INCOME TAX-II, Vs. FRIENDS CLEARING AGENCY (P) LTD., INCOME TAX APPEAL NO. 3 of 1999, DATE OF DECISION : 04.01.2011, HIGH COURT OF DELHI 

The mere fact that the Bank had not shown the accrual of interest in its books of accounts would not make the liability contingent. Insofar as the Bank was concerned, it had laid a claim by filing a suit. There is nothing to show that the Bank had not claimed interest for all the three periods i.e. pre-suit, pendente lite and future interest. 

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