https://www.taxtmi.com/caselaws?id=276868 The Patna HC examined the financing arrangement in substance and held that the true character of the payment had to be gathered from the contract and surrounding circumstances, not its label. Because the trust had a dominant role, including power to recall advances, control business arrangements, secure assets, and collect sale proceeds, the stipulated profit-linked payment was treated as commercially extravagant and inconsistent with ordinary borrowing. The arrangement was characterised as a joint adventure or quasi-partnership, with profits to be divided after ascertainment, rather than a loan transaction. The amounts were therefore not deductible as revenue expenditure under section 10(2)(iii) or section 10(2)(xv), and the answer was against the assessee. en-us Wed, 12 Feb 1958 00:00:00 +0530 Mon, 19 Nov 2018 17:29:51 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=276868 The Patna HC examined the financing arrangement in substance and held that the true character of the payment had to be gathered from the contract and surrounding circumstances, not its label. Because the trust had a dominant role, including power to recall advances, control business arrangements, secure assets, and collect sale proceeds, the stipulated profit-linked payment was treated as commercially extravagant and inconsistent with ordinary borrowing. The arrangement was characterised as a joint adventure or quasi-partnership, with profits to be divided after ascertainment, rather than a loan transaction. The amounts were therefore not deductible as revenue expenditure under section 10(2)(iii) or section 10(2)(xv), and the answer was against the assessee. Case-Laws Income Tax Wed, 12 Feb 1958 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=276868