Interest on Money Borrowed

Last updated: 18 May 2008

Court :
HC

Brief :
Held that in order to allow interest paid on borrowings in case of partnership firms, the assessee first to establish that it is allowable u/s 36(1)(iii) and then it does not exceed amount in excess of the limit laid down in sec. 40(b)(iv). Also held that opening balance of profits of the firm exceeds the loans given to sister concerns, presumed to be given out of its own funds.

Citation :
Munjal Sales Corporation Vs. CIT and Othrs 02/19/2008 [2008] 298 ITR 298

Interest on Money Borrowed Munjal Sales Corporation Vs. CIT and Othrs 02/19/2008 [2008] 298 ITR 298 Case Fact: Interest on money borrowed by the firm when allowable for partnership firm. Also interest free loans given to sister concern. Decision: Held that in order to allow interest paid on borrowings in case of partnership firms, the assessee first to establish that it is allowable u/s 36(1)(iii) and then it does not exceed amount in excess of the limit laid down in sec. 40(b)(iv). Also held that opening balance of profits of the firm exceeds the loans given to sister concerns, presumed to be given out of its own funds.
 
Comments


Recent Judgments :

  1. CESTAT: Service Tax Demand Based Solely on ITR Data Unsustainable; 40% Valuation Applicable to Original Works Contract
  2. CESTAT: Renting Vehicles on Per-Trip Basis Not Taxable as Supply of Tangible Goods
  3. CESTAT Denies Refund of Ocean Freight Service Tax Claim Filed Beyond Limitation
  4. CESTAT Quashes Service Tax Demand Based Merely on Form 26AS; Renting of Residential Hostel Held Non-Taxable
  5. CESTAT: Rajasthan Sales Tax Subsidy under RIPS 2010 Not includible in Excise Assessable Value
  6. CESTAT: Late Payment Charges in the Nature of Interest Not Taxable as Declared Service
  7. CESTAT: Educational Services Exempt Under Section 66D; Extended Period Cannot Be Invoked Without Wilful Suppression
  8. CESTAT: No Service Tax on Royalty under RCM if Mining Lease Was Executed Before 1 April 2016
  9. No pre-deposit required for filing appeal before the GSTAT against penalty-only orders where proceedings commenced prior to October 01 2025
  10. Refund cannot be withheld under Section 54(11) of the CGST Act merely because the Revenue contemplates filing an appeal

View More Judgments »


Trending Online Classes

view all classess

CCI Pro
Meet our CAclubindia PRO Members
Pro Member Manjunath Manjunath Pro Member Ishwarya Keerthi BIshwarya Keerthi BPro Member Ankur RiswadkarAnkur RiswadkarPro Member SUBASH CHANDRA BOSESUBASH CHANDRA BOSEPro Member Hanuman YanduriHanuman Yanduri
Subscribe to Pro
Join an elite circle of professionals

Browse by Category




Latest Job Openings

View all
Company
09 September 2026
Semi Qualified CA / CA Inter - 2 Groups Cleared

Getmyca Consultant Pvt Ltd

New Delhi

CA Inter

View Details
Company
22 September 2026
Account Assistant

Chirag P Shah & Co. Chartered Accountant

Pune

B.Com

View Details
Company
20 September 2026
Semi Qualified CA

Navin & Associates

Mumbai

CA Inter

View Details
Company
Featured 21 September 2026
Consultant - Reporting

Finrep Advisors LLP

Mumbai

CA

View Details
Company
ARTICLESHIP 28 September 2026
Junior Accountant

J S P M & Associates LLP

Pune

B.Com

View Details
Company
ARTICLESHIP 18 September 2026
Industrial Trainee

Twenty Point Nine Five Ventures Private Limited

Noida

CA Inter

View Details
Company
ARTICLESHIP 15 September 2026
Freelance Taxation Content Writer Intern

Interactive Media Pvt Ltd.

New Delhi

CA Inter

View Details
Company
Featured 12 September 2026
Assistant Manager - Finance & Compliance

Naveen Fintech Pvt Ltd

Kolkata

CA Inter

View Details