https://www.taxtmi.com/caselaws?id=7371 Interest on borrowings advanced to a partnership firm in which the assessee, his wife and minor children were involved was treated as allowable business expenditure where the advance was referable to business investment and used for the purposes of the assessee's business. The firm's separate tax status, the deeming of income under section 16(3), and the absence of registration or commencement of production did not change that character. A debit balance in the profit and loss account was also not enough, by itself, to justify disallowance of interest unless there was evidence of actual diversion of borrowed funds for non-business use. On the materials noted, the stated conclusion favoured allowance of the interest claim. en-us Mon, 09 Sep 1968 00:00:00 +0530 Wed, 18 Feb 2009 19:01:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7371 Interest on borrowings advanced to a partnership firm in which the assessee, his wife and minor children were involved was treated as allowable business expenditure where the advance was referable to business investment and used for the purposes of the assessee's business. The firm's separate tax status, the deeming of income under section 16(3), and the absence of registration or commencement of production did not change that character. A debit balance in the profit and loss account was also not enough, by itself, to justify disallowance of interest unless there was evidence of actual diversion of borrowed funds for non-business use. On the materials noted, the stated conclusion favoured allowance of the interest claim. Case-Laws Income Tax Mon, 09 Sep 1968 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7371