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

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the above issue? If not please inform.

AI Summary

Deductibility of arranger fees: whether they must be added back in book profit computation for business income.
A company paid an arranger fee to a finance company for procuring a loan and on lent the proceeds to another person charging the financier's interest rate plus a margin; the central question is whether the arranger fee must be added back in computing book profit for income from business or profession.