DEDUCTION OF ARRANGER FESS

[S.C. WADHWA]

A company X took loan from finance company and paid 1 lac as arranger fees to it for procurement of loan.

X gave the loan to another person named Y and charged interest at rate charged by finance company plus 1%.

Query is

Whether arranger fees so paid shall be added back in computation of book profit income from business or profession

AI Summary

Clarification Needed on Adding Arranger Fee to Book Profit for Business Income Calculation Under Tax Rules A company, referred to as X, obtained a loan from a finance company and paid an arranger fee of 1 lakh for securing the loan. X then lent this amount to another individual, Y, charging interest at the finance company's rate plus an additional 1%. The query raised concerns whether the arranger fee should be added back when computing the book profit for income from business or profession. A response from a participant, Mariappan Govindarajan, inquired if the issue had been clarified, requesting further information if clarification was still needed.