High Court denies interest deduction on bank loan for capital contribution in business under Income-tax Act

The High Court dismissed the petitioner's reference seeking deduction of interest paid on a bank loan for repaying a previous loan under section 67(3) of the Income-tax Act. It was held that since the loan was utilized for capital contribution in the business, no legal issue was raised.

---

---

The petitioner sought reference on whether interest paid on a bank loan for repaying a previous loan qualified for deduction under section 67(3) of the Income-tax Act. The High Court found that the loan was used for capital contribution in the business, so no question of law arose. Judgment dismissed.

---