1928 (4) TMI 4 - HC - Income Tax

Summary

The High Court of Madras ruled in favor of the Nattukottai Chetti firm A.L.A.R., allowing them to deduct interest paid on borrowed capital put into their unsuccessful branch, Ramaswami & Co. The court found that Ramaswami & Co. was not separate from A.L.A.R., akin to different departments of one business. The court also held that as long as the borrowed capital was originally intended for the business and interest was paid on it, the deduction was permissible. The court awarded costs of Rs. 250 to the assessees.