As per an agreement company 'X' is eligible to collect its Interest expenses from company Y. At the end of 8 years X has to sell its asset to Y. But the Company X has decided not to collect the interest amount from Y. X itself paying the Interest expense and charging it to their Profit & Loss. X is not even having an Internal Circular to do so, except some mails.
Is that waiver acceptable?
Please do suggest:)
No, the waiver of such interest is not acceptable. As the burden of interest expenses is not on Company X hence such expense is not allowable as per income tax law also.
O P Bagla & Co LLP
New Delhi
CA Inter
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Karia Overseas
Ahmedabad
CA
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