Opportunity to furnish unsecured-loan confirmations is required before reassessment initiation; proceedings require fresh consideration after taxpayer...
Under-reporting on a first reassessment return attracts penalty, while enhanced misreporting penalty requires proof of a statutory misreporting catego...
Section 36(1)(iii) allows deduction of interest where the borrowing, the interest payment and use of capital for business are established, and the statutory phrase "for the purposes of business" is of wide import. The Court applied the test of commercial expediency, holding that interest need not be disallowed merely because borrowed funds were routed through a subsidiary or group concern, and it was not necessary that the advance should directly earn profits for the assessee. Accepting the Tribunal's view on the composite nature of the business and the business purpose of the borrowing, the Court held the interest on the bank loan to be allowable and set aside the High Court's contrary decision.
Section 36(1)(iii) allows deduction of interest where the borrowing, the interest payment and use of capital for business are established, and the statutory phrase "for the purposes of business" is of wide import. The Court applied the test of commercial expediency, holding that interest need not be disallowed merely because borrowed funds were routed through a subsidiary or group concern, and it was not necessary that the advance should directly earn profits for the assessee. Accepting the Tribunal's view on the composite nature of the business and the business purpose of the borrowing, the Court held the interest on the bank loan to be allowable and set aside the High Court's contrary decision.
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TaxTMI 
TaxTMI 
of 4915 
