Interest on borrowed fund - revenue expenditure

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An existing private limited company in transportation business wants to acqire another pvt.ltd. company doing tansportation business by utilising funds borrowed for this purpose. Whether interest paid on such borrowed funds is an allowable revenue expenditure under Income Tax Act.

AI Summary

Interest on Borrowed Funds for Acquisition: Is It Allowable Revenue Expenditure Under Income Tax Act? Explore Conflicting Judgments. An existing private limited company in the transportation sector plans to acquire another similar company using borrowed funds. The query concerns whether the interest paid on these borrowed funds qualifies as an allowable revenue expenditure under the Income Tax Act. The response indicates that there are conflicting judgments on this issue, suggesting that a thorough examination of relevant case law is necessary to determine an appropriate solution.