https://www.taxtmi.com/caselaws?id=337025 Interest on overdraft borrowings was held not deductible where the borrowed funds were directly routed as interest-free advances to a related party for non-business purposes. The factual inquiry established a clear nexus between the interest-bearing borrowing and the advance, and the available interest-free capital could not be relied on because it had already been deployed; exempt income from a different period also did not alter that result. The presumption that interest-free funds were used was therefore unavailable once direct utilisation of borrowed funds was shown, and the related interest disallowance under section 36(1)(iii) was sustained. en-us Fri, 26 Aug 2016 00:00:00 +0530 Mon, 02 Jan 2017 10:26:31 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=337025 Interest on overdraft borrowings was held not deductible where the borrowed funds were directly routed as interest-free advances to a related party for non-business purposes. The factual inquiry established a clear nexus between the interest-bearing borrowing and the advance, and the available interest-free capital could not be relied on because it had already been deployed; exempt income from a different period also did not alter that result. The presumption that interest-free funds were used was therefore unavailable once direct utilisation of borrowed funds was shown, and the related interest disallowance under section 36(1)(iii) was sustained. Case-Laws Income Tax Fri, 26 Aug 2016 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=337025