https://www.taxtmi.com/caselaws?id=180050 A redemption premium paid to debenture-holders on early termination or variation of debenture terms is not interest on capital borrowed for business because interest is the amount contracted for the use of money during the loan period, whereas the premium arises only on redemption. The payment is also not deductible as business expenditure because it relates to a re-arrangement of borrowed capital and forms part of the capital outlay, not revenue spending in the ordinary conduct of business. The amount was therefore treated as capital expenditure and not allowable in computing business profits. en-us Sat, 06 Dec 1952 00:00:00 +0530 Tue, 15 Mar 2016 18:35:58 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=180050 A redemption premium paid to debenture-holders on early termination or variation of debenture terms is not interest on capital borrowed for business because interest is the amount contracted for the use of money during the loan period, whereas the premium arises only on redemption. The payment is also not deductible as business expenditure because it relates to a re-arrangement of borrowed capital and forms part of the capital outlay, not revenue spending in the ordinary conduct of business. The amount was therefore treated as capital expenditure and not allowable in computing business profits. Case-Laws Income Tax Sat, 06 Dec 1952 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=180050