https://www.taxtmi.com/caselaws?id=202900 The text addresses deductibility of interest on borrowed capital, clarifying that entitlement depends on the nexus between the advance/investment and business purpose assessed by the dominant purpose test; if the dominant purpose is not to earn income, deduction is not available. The plain language of the provision requires natural meaning, but tax authorities have jurisdiction to probe the substance, lift the veil and determine true legal character where devices conceal nature of transactions. The appropriate standard for assessment is whether a prudent person acting in the taxpayers business would have made the transaction, and enquiries must be fact-specific without becoming a roving probe. en-us Tue, 01 Feb 2011 00:00:00 +0530 Mon, 19 Jan 2026 15:17:34 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=202900 The text addresses deductibility of interest on borrowed capital, clarifying that entitlement depends on the nexus between the advance/investment and business purpose assessed by the dominant purpose test; if the dominant purpose is not to earn income, deduction is not available. The plain language of the provision requires natural meaning, but tax authorities have jurisdiction to probe the substance, lift the veil and determine true legal character where devices conceal nature of transactions. The appropriate standard for assessment is whether a prudent person acting in the taxpayers business would have made the transaction, and enquiries must be fact-specific without becoming a roving probe. Case-Laws Income Tax Tue, 01 Feb 2011 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=202900