https://www.taxtmi.com/caselaws?id=188076 Interest on borrowings is deductible under section 36(1)(iii) only when the funds are used for the purpose of business. Borrowings taken directly to pay income tax were held not to satisfy that test, so the related interest was not allowable as a deduction. Borrowings taken directly to pay dividend were treated as connected with the company's business, so the related interest fell within the business-purpose requirement and was allowable. The reference was therefore answered partly for the assessee and partly against it. en-us Fri, 17 Jan 1997 00:00:00 +0530 Thu, 17 Nov 2016 13:14:56 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=188076 Interest on borrowings is deductible under section 36(1)(iii) only when the funds are used for the purpose of business. Borrowings taken directly to pay income tax were held not to satisfy that test, so the related interest was not allowable as a deduction. Borrowings taken directly to pay dividend were treated as connected with the company's business, so the related interest fell within the business-purpose requirement and was allowable. The reference was therefore answered partly for the assessee and partly against it. Case-Laws Income Tax Fri, 17 Jan 1997 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=188076