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2016 (11) TMI 607 - HC - Income TaxInterest on the amount borrowed for declaring dividend - allowability as deduction u/s 36(1)(iii)- Held that:- The learned counsel for the respondent/assessee placed before us bank statements of Axis Bank and Bank of India to the effect that as on the dates when the dividend was, in fact declared, there was a credit balance on account of prior foreign inward remittances. Thus, and the Learned Standing Counsel does not dispute this, the assesssee did have required resources internally to effect the declaration of dividend and did not have to resort to bank borrowings for the said purpose. In any event, even if borrowed funds had been utilized for the purposes of declaration of dividend, the payment of interest on such borrowings constitutes expenditure for the purpose of the business of the assessee and is an allowable deduction in terms of Section 36(1)(iii) of the Act. See CIT vs. Tingri Tea Company Ltd [1970 (2) TMI 25 - CALCUTTA High Court ]- Decided in favour of assessee
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