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2013 (12) TMI 1003 - AT - Income TaxInterest paid on deposits – Held that:- The taxpayer received deposit outside the books of account and paid interest - Following assessee’s own case for the assessment year 2008-09 - The taxpayer borrowed funds for enhancing the working capital for the purpose of money lending business - Interest on capital borrowed for the purpose of business falls within the provisions of section 36(1)(iii) - Any interest paid on the capital borrowed for the purpose of business or profession has to be allowed as deduction u/s 36(1)(iii) - Provisions of section 37(1) are not applicable in respect of interest on the capital borrowed for business purpose –As per provisions of it can be inferred that the intent of legislature is to disallow the payment like protection money, extortion, hafta, bribe, etrc. when it was claimed as business expenditure - It is immaterial whether the money was borrowed in personal capacity or not – Decided against Revenue.
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