https://www.taxtmi.com/caselaws?id=192449 Interest paid on money borrowed to meet advance income-tax liability under section 18A is not an allowable deduction under section 12(2). The advance tax payment discharges a statutory obligation rather than an expenditure laid out to earn income by commercial expediency, and income-tax is treated as a charge on profits after they are earned, not as an outgoing incurred to produce those profits. The statutory bar against allowing sums paid on account of tax on profits supports the conclusion that the borrowing lacks the required nexus with income. Any statutory interest received on advance tax is merely incidental and does not change the character of the borrowing or make the interest deductible. en-us Wed, 01 Jul 1959 00:00:00 +0530 Thu, 01 Jun 2017 15:56:51 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=192449 Interest paid on money borrowed to meet advance income-tax liability under section 18A is not an allowable deduction under section 12(2). The advance tax payment discharges a statutory obligation rather than an expenditure laid out to earn income by commercial expediency, and income-tax is treated as a charge on profits after they are earned, not as an outgoing incurred to produce those profits. The statutory bar against allowing sums paid on account of tax on profits supports the conclusion that the borrowing lacks the required nexus with income. Any statutory interest received on advance tax is merely incidental and does not change the character of the borrowing or make the interest deductible. Case-Laws Income Tax Wed, 01 Jul 1959 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=192449