Taxability on Interest Account under provisions of Sec. 36(1)(iii) of the Income Tax Act

Last updated: 02 July 2021
Quick Summary
This appeal concerns the taxability of interest on funds provided by the assessee to an associated concern, M/s G. Drugs and Pharmaceuticals Ltd. The Assessing Officer disallowed interest expenses under Section 36(1)(iii) of the Income Tax Act, arguing the funds were diverted for non-business purposes. The assessee contended that the associated concern had merged with the company, making the disallowance irrelevant, but failed to provide the necessary High Court amalgamation order. The CIT(A) upheld the disallowance and also ruled that certain interest amounts should be capitalised.

Court :
ITAT Chandigarh

Brief :
This is an appeal by the assessee against the order dt. 13/08/2019 of the Ld. CIT(A)-3 Ludhiana.

Citation :
ITA NO. 1419/Chd/2019

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