https://www.taxtmi.com/caselaws?id=168285 Interest on borrowed capital is deductible where the borrowing is for the purposes of the assessee's business, even if the asset acquired from the borrowing was not used during the relevant year of account. The test is the business purpose of the borrowing, not the immediate operational use or profitability of the asset created with those funds. The provision does not distinguish between borrowing for capital or revenue assets, and deduction cannot be denied merely because the borrowing had not yet generated income or the asset was still non-operational. The allowance was therefore held admissible in favour of the assessee. en-us Mon, 24 Mar 1958 00:00:00 +0530 Sat, 11 May 2024 12:30:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=168285 Interest on borrowed capital is deductible where the borrowing is for the purposes of the assessee's business, even if the asset acquired from the borrowing was not used during the relevant year of account. The test is the business purpose of the borrowing, not the immediate operational use or profitability of the asset created with those funds. The provision does not distinguish between borrowing for capital or revenue assets, and deduction cannot be denied merely because the borrowing had not yet generated income or the asset was still non-operational. The allowance was therefore held admissible in favour of the assessee. Case-Laws Income Tax Mon, 24 Mar 1958 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=168285