Case law

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Querist : Anonymous

Querist : Anonymous (Querist)

08 February 2014 Hi sir/mam,

Can you please solve my query:-

That if any assessee take the money from bank for the business purpose but doesn't use the said money for business but he uses it some where else and that amount is being dis allowed by income tax department so is there any case law to cover up from this problem.

Reply as soon as possible.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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09 February 2014 well, if the money was not used to for business at all, then disallowance is warranted..

such cases are fought on the facts and not on precedents..unless you are able to justify how the payment of said interest was for the benefit of your business, it is hard to avoid disallowance..

Querist : Anonymous

Querist : Anonymous (Querist)

10 February 2014 IS there any Case study via which i can have an idea.?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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10 February 2014 there are many...some in favor of the assessee, some against...remember such cases are absolutely based on facts of each case. So factual matrix is the most relevant factor in getting decision in your favor.

please refer https://www.caclubindia.com/judiciary/interest-on-borrowed-fund-allowed-only-on-the-portion-used-in-the-business-1861.asp#.UvhmDs7DV9A

https://www.caclubindia.com/articles/analysis-of-section-36-1-iii-interest-on-borrowed-capital-13397.asp#.UvhmJ87DV9A

http://law.incometaxindia.gov.in/dittaxmann/incometaxacts/2005itact/casesec36%281%29%28iii%29.htm

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Querist : Anonymous

Querist : Anonymous (Querist)

10 February 2014 Ok,

Thank you so much sir..!!

Nikhil Kaushik

Nikhil Kaushik (Expert)
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10 February 2014 you are welcome friend :)

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