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2016 (5) TMI 399 - HC - Income TaxDisallowance of interest under section 36(1)(iii) - Held that:- In the light of the judgment of the Apex Court in Hero Cycles (P) Limited vs. CIT, Ludhiana, (2015 (11) TMI 1314 - SUPREME COURT OF INDIA ) and judgment of this Court in Commissioner of Income Tax vs. Kapsons Associates, (2015 (8) TMI 1277 - PUNJAB AND HARYANA HIGH COURT ) the matter is remanded to the Tribunal to decide afresh in accordance with law. In Hero Cycles (P) Limited's case (supra), the Apex Court was considering the issue with regard to interest on borrowed capital (interest free loans). It was held that once it is established that there is nexus between the expenditure and purpose of business, revenue cannot justifiably claim to put itself in arm chair of businessman or in position of Board of Directors and assume role to decide how much is reasonable expenditure having regard to the circumstances of the case
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