https://www.taxtmi.com/caselaws?id=217181 Article 7(3) of the India-Mauritius tax treaty allows deduction of expenses incurred for the business of a permanent establishment without importing domestic-law limits where the treaty text contains no restrictive clause, so section 43B could not be used to disallow unpaid bonus expenditure. By contrast, expenditure directly referable to income outside business profits remains non-deductible in computing treaty profits; the same principle reflected in section 14A was applied to interest linked to tax-free bond income. On the facts, the borrowing had a direct nexus with the exempt investment, but the adjustment was confined to interest for the short period the loan remained outstanding. en-us Wed, 03 Oct 2012 00:00:00 +0530 Mon, 27 May 2013 12:15:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=217181 Article 7(3) of the India-Mauritius tax treaty allows deduction of expenses incurred for the business of a permanent establishment without importing domestic-law limits where the treaty text contains no restrictive clause, so section 43B could not be used to disallow unpaid bonus expenditure. By contrast, expenditure directly referable to income outside business profits remains non-deductible in computing treaty profits; the same principle reflected in section 14A was applied to interest linked to tax-free bond income. On the facts, the borrowing had a direct nexus with the exempt investment, but the adjustment was confined to interest for the short period the loan remained outstanding. Case-Laws Income Tax Wed, 03 Oct 2012 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=217181