Disallowance of interest expenditure
This query is : Resolved
CA Govind lohar
(Querist)
20 December 2014
If assessee has taken loan for starting new business activity ,and the assessee has incurred interest expenditure ,can this interest expenditure shall be allowed as business deduction where the assessee could not able to start new business activity due to certain unfavourable circumstances ?
CA R SEETHARAMAN
(Expert)
20 December 2014
This is an allowable deduction.
Amol S Joglekar
(Expert)
20 December 2014
It is ALLOWABLE. Nothing to be worried about 14A and rule 8D
CA Govind lohar
(Querist)
20 December 2014
Please substantiate your answer with some Case Law in this regards.
Amol S Joglekar
(Expert)
20 December 2014
I dont thin any case law is needed. Starting a BUSINESS and starting business activity are 2 way apart things.
The moment the loan is taken justifies that the business is started, no matter if you are ablew to execute any SALES.
Your views please.
The moment the loan is taken justifies that the business is started, no matter if you are ablew to execute any SALES.
Your views please.
20 December 2014
There is no need for case law as per section 37(1) any expenditure incurred wholly and exclusively for business purpose is allowed.
In your case when you have taken business loan and interest exp is incurred it gets covere by this said section and it doesnty matter whether business is started or not.
In your case when you have taken business loan and interest exp is incurred it gets covere by this said section and it doesnty matter whether business is started or not.
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