Hello,
I have a query regarding Section 40A(2) with regards to payment of an expense incurred by the assessee in relation to loan taken by its former director.
To elaborate; if an assessee takes up a loan from its director during the year on which it pays interest to the director, will it still be covered under Section 40A(2) if the director retires from the Company during the year(Assuming the director retires on 30th April of the financial year)? Do quote the links if any
P.S. - As per my knowledge of the section, only persons having substantial interest in the assessee's business at any point during the year are covered under section 40A(2) for any payment made to them for expenses even if they cease to hold a substantial interest in the assessee's business.
Thanks in advance
CAclubindia
