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Interest on borrowed capital ::

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Court :
HC

Brief :
Held by the Hon`ble Court that as no nexus could be found between the borrowing and the interest free advance to sister concern and with clear finding that there was no element of commercial expediency, the interest paid on borrowed fund is not deductible.

Citation :
Elmer Havell Electrics and others Vs. C.I.T. and another

Interest on borrowed capital Elmer Havell Electrics and others Vs. C.I.T. and another 05/05/2005 (2005) 277 ITR 549 (Delhi) Case Fact: Whether interest paid on the funds borrowed and given as interest free loan to its sister concern is allowable as deduction? Decision: Held by the Hon`ble Court that as no nexus could be found between the borrowing and the interest free advance to sister concern and with clear finding that there was no element of commercial expediency, the interest paid on borrowed fund is not deductible.
 

CA.Saibaburao Nanduri
on 22 January 2008
Published in Income Tax
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