https://www.taxtmi.com/caselaws?id=251107 A State Financial Corporation's guarantee commission paid to the State Government for guarantees under Section 7 of the State Financial Corporations Act, 1951 was treated as a deductible business expenditure under Section 37 of the Income-tax Act, 1961. The HC held that the Corporation's lending and industrial development functions had a commercial character, and that Section 7 did not prohibit a guarantee commission merely because no express provision authorised it. The arrangement was commercially justified because the State Government assumed risk, and the levy was not inconsistent with the statutory framework. The disallowance was therefore set aside in favour of the assessee. en-us Tue, 22 Jul 2014 00:00:00 +0530 Tue, 05 May 2015 13:18:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=251107 A State Financial Corporation's guarantee commission paid to the State Government for guarantees under Section 7 of the State Financial Corporations Act, 1951 was treated as a deductible business expenditure under Section 37 of the Income-tax Act, 1961. The HC held that the Corporation's lending and industrial development functions had a commercial character, and that Section 7 did not prohibit a guarantee commission merely because no express provision authorised it. The arrangement was commercially justified because the State Government assumed risk, and the levy was not inconsistent with the statutory framework. The disallowance was therefore set aside in favour of the assessee. Case-Laws Income Tax Tue, 22 Jul 2014 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=251107