22 December 2018
We are the statutory auditor of a company X Pvt Ltd and the same company has acquired loan for the purpose of acquisition of shares of the other company say Y Pvt Ltd. These both companies are private company.The X Pvt Ltd has acquired 51% shares in following company. Now my question is whether the X Pvt Ltd will get benefit of deduction of interest paid on such loan u/s 36(1)(iii) of Income Tax act 1961. Please give your comment.
22 December 2018
If the acquisition of shares in Y Pvt Ltd is an integral part of business of X Pvt ltd , interest on the said borrowing is allowable under Section 36(1)(iii).
CAclubindia
