https://www.taxtmi.com/caselaws?id=5284 Member contributions credited to a Loss Equalisation and Capital Redemption Reserve Fund were not treated as capital borrowed for business purposes because they did not create a real lender-borrower relationship. The Court noted that the payments were made under the bye-laws to convert partly paid shares into fully paid shares and to meet financing obligations, with any refund dependent on availability. As the amounts were not borrowed capital, interest paid on them did not qualify for deduction under section 36(1)(iii) of the Income-tax Act, 1961. The alternative claim under section 37 was not decided for lack of sufficient facts. en-us Mon, 01 May 1989 00:00:00 +0530 Mon, 21 Oct 2013 17:27:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=5284 Member contributions credited to a Loss Equalisation and Capital Redemption Reserve Fund were not treated as capital borrowed for business purposes because they did not create a real lender-borrower relationship. The Court noted that the payments were made under the bye-laws to convert partly paid shares into fully paid shares and to meet financing obligations, with any refund dependent on availability. As the amounts were not borrowed capital, interest paid on them did not qualify for deduction under section 36(1)(iii) of the Income-tax Act, 1961. The alternative claim under section 37 was not decided for lack of sufficient facts. Case-Laws Income Tax Mon, 01 May 1989 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=5284