Interset paid on loan taken to pay income tax.
This query is : Resolved
16 November 2012
Dear sir ,
If any assesses borrowed money from bank for paying income tax.interest paid on this loan shall be allowed in profit & loss or not.
please tell me the treatment of same
If any assesses borrowed money from bank for paying income tax.interest paid on this loan shall be allowed in profit & loss or not.
please tell me the treatment of same
16 November 2012
Not allowed under income tax act.
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16 November 2012
For accounting purpose, such interest can be debited in profit and loss account. But for income tax purpose, that interest will not be considered as business expenditure .
Citation :- East India Pharmaceutical Works case reported in 224 ITR 627.
Citation :- East India Pharmaceutical Works case reported in 224 ITR 627.
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