Interest on Business Loans Deductible under Income Tax Act

The interest paid on borrowed funds for business purposes was deemed a legitimate deduction under section 36 of the Income Tax Act, 1961. The higher authorities allowed the claim initially disallowed by the Assessing Officer. The appeal was dismissed as no legal issue was identified.

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The respondent-assessee borrowed funds for business purposes, paid interest, and claimed it as a business expenditure. The Assessing Officer disallowed the claim, but it was later allowed by higher authorities. The interest paid on the borrowed funds was considered a legitimate deduction under section 36 of the Income Tax Act, 1961. The appeal was dismissed as no question of law arose.

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