https://www.taxtmi.com/caselaws?id=277211 A banking company's interest on fixed deposits was treated as deductible business expenditure under section 10(2)(iii) because the deposits were received in the ordinary course of banking and formed part of the bank's borrowed capital used in its business. The securities, including the Mysore securities, were held as circulating capital and stock-in-trade, so the deposits could not be characterised as money borrowed specifically for investment in tax-free securities under the proviso to section 8. The later 1956 Explanation was regarded as creating a legal fiction not applicable to the assessment year concerned. Accordingly, no apportionment of interest was permitted merely because some securities yielded exempt income, and the entire interest remained allowable. en-us Wed, 09 Nov 1960 00:00:00 +0530 Thu, 29 Nov 2018 10:23:17 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=277211 A banking company's interest on fixed deposits was treated as deductible business expenditure under section 10(2)(iii) because the deposits were received in the ordinary course of banking and formed part of the bank's borrowed capital used in its business. The securities, including the Mysore securities, were held as circulating capital and stock-in-trade, so the deposits could not be characterised as money borrowed specifically for investment in tax-free securities under the proviso to section 8. The later 1956 Explanation was regarded as creating a legal fiction not applicable to the assessment year concerned. Accordingly, no apportionment of interest was permitted merely because some securities yielded exempt income, and the entire interest remained allowable. Case-Laws Income Tax Wed, 09 Nov 1960 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=277211