https://www.taxtmi.com/caselaws?id=206115 Interest paid by a foreign enterprise on borrowings from shareholder-lenders or joint venture partners for Indian project operations was treated as deductible in computing profits attributable to its Indian permanent establishment. Article 7(3)(b) of the India-Belgium treaty was held to deny only internal interest-like charges between a permanent establishment and its head office, not actual interest paid to independent outside lenders who were also shareholders. The Explanation to section 37 of the Income-tax Act did not apply because the claim was made under section 36(1)(iii). In the absence of a specific Indian thin-capitalization rule, the deduction could not be denied on a generalized anti-abuse or recharacterisation theory. en-us Wed, 10 Nov 2010 00:00:00 +0530 Thu, 13 Oct 2011 00:13:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=206115 Interest paid by a foreign enterprise on borrowings from shareholder-lenders or joint venture partners for Indian project operations was treated as deductible in computing profits attributable to its Indian permanent establishment. Article 7(3)(b) of the India-Belgium treaty was held to deny only internal interest-like charges between a permanent establishment and its head office, not actual interest paid to independent outside lenders who were also shareholders. The Explanation to section 37 of the Income-tax Act did not apply because the claim was made under section 36(1)(iii). In the absence of a specific Indian thin-capitalization rule, the deduction could not be denied on a generalized anti-abuse or recharacterisation theory. Case-Laws Income Tax Wed, 10 Nov 2010 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=206115