https://www.taxtmi.com/caselaws?id=290945 Interest on a bona fide loan advanced by a partner to a firm, over and above the agreed capital contribution, was deductible where the money was used for capital expenditure in the business. The court construed the statutory phrase to include sums borrowed for business capital use and held that the lender's identity did not matter, since a partner may act in a dual capacity and lend to the firm as a distinct loan. The existence of an obligation to pay interest irrespective of profits supported the borrowing character of the advance, and describing the funds as surplus capital did not change their true legal nature. en-us Tue, 20 Mar 1928 00:00:00 +0530 Thu, 22 Oct 2020 17:29:54 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=290945 Interest on a bona fide loan advanced by a partner to a firm, over and above the agreed capital contribution, was deductible where the money was used for capital expenditure in the business. The court construed the statutory phrase to include sums borrowed for business capital use and held that the lender's identity did not matter, since a partner may act in a dual capacity and lend to the firm as a distinct loan. The existence of an obligation to pay interest irrespective of profits supported the borrowing character of the advance, and describing the funds as surplus capital did not change their true legal nature. Case-Laws Income Tax Tue, 20 Mar 1928 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=290945