https://www.taxtmi.com/caselaws?id=798091 Interest on borrowed capital is not disallowable under Section 36(1)(iii) merely because an interest-free advance is made to a family member where the taxpayer's own funds exceed that advance. An established connection between borrowed funds and the non-business advance is necessary, particularly where the overdraft was obtained for business purposes in earlier years. In the absence of evidence showing such nexus or proximity, the interest disallowance was deleted. en-us Wed, 19 Aug 2026 00:00:00 +0530 Wed, 02 Sep 2026 08:30:17 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=798091 Interest on borrowed capital is not disallowable under Section 36(1)(iii) merely because an interest-free advance is made to a family member where the taxpayer's own funds exceed that advance. An established connection between borrowed funds and the non-business advance is necessary, particularly where the overdraft was obtained for business purposes in earlier years. In the absence of evidence showing such nexus or proximity, the interest disallowance was deleted. Case-Laws Income Tax Wed, 19 Aug 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=798091