https://www.taxtmi.com/caselaws?id=6691 Whether interest on borrowed funds is deductible depends on whether the capital was actually borrowed for and employed in the taxpayer's business; where borrowings were diverted to partners' personal accounts, used to pay taxes or meet liabilities of a related concern, or the firm had ceased the relevant business, interest on such diverted or never-utilised amounts is not allowable - firm's disallowance upheld. Likewise, partners cannot claim that portion as individual deductions where the funds originated from the firm, the partners were not carrying on the relevant business, dividends and benefits accrued to them personally, and the debited interest did not constitute an enforceable liability - individual claims rejected. en-us Fri, 06 Aug 1965 00:00:00 +0530 Sun, 01 Feb 2009 11:18:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=6691 Whether interest on borrowed funds is deductible depends on whether the capital was actually borrowed for and employed in the taxpayer's business; where borrowings were diverted to partners' personal accounts, used to pay taxes or meet liabilities of a related concern, or the firm had ceased the relevant business, interest on such diverted or never-utilised amounts is not allowable - firm's disallowance upheld. Likewise, partners cannot claim that portion as individual deductions where the funds originated from the firm, the partners were not carrying on the relevant business, dividends and benefits accrued to them personally, and the debited interest did not constitute an enforceable liability - individual claims rejected. Case-Laws Income Tax Fri, 06 Aug 1965 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=6691