https://www.taxtmi.com/caselaws?id=277211 The article explains the Madras High Court's treatment of bank deposit interest under the Income-tax Act, 1922, holding that interest paid on deposits received in the ordinary course of banking merges with the bank's general funds and constitutes interest on capital borrowed for business, therefore deductible under section 10(2)(iii). The Court rejected apportionment on the basis that investments in tax-free securities were independent transactions and that, absent the later statutory Explanation, the proviso to section 8 did not apply. Applied to the facts, no portion of deposit interest was treated as interest on money borrowed exclusively to invest in tax-free securities, so the entire interest was 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 The article explains the Madras High Court's treatment of bank deposit interest under the Income-tax Act, 1922, holding that interest paid on deposits received in the ordinary course of banking merges with the bank's general funds and constitutes interest on capital borrowed for business, therefore deductible under section 10(2)(iii). The Court rejected apportionment on the basis that investments in tax-free securities were independent transactions and that, absent the later statutory Explanation, the proviso to section 8 did not apply. Applied to the facts, no portion of deposit interest was treated as interest on money borrowed exclusively to invest in tax-free securities, so the entire interest was allowable. Case-Laws Income Tax Wed, 09 Nov 1960 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=277211