Interest on refund of application money
This query is : Resolved
23 May 2016
Whether interest payment on refund of application money of 'compulsory redeemable preference shares' is allowable for income tax purpose.
Soumitra Basu
(Expert)
25 May 2016
Provided it is a compensatory in nature and not for violation of any law
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30 May 2016
As it is related to allotment of shares, it is capital expenditure and should not be allowable.
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Soumitra Basu
(Expert)
31 May 2016
As per the query available, it was not related to allotment of shares. It was for refund of the application money belatedly. Therefore, it is business expenditure under section 37 of the Income Tax Act.
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