Interest on borrowed capital
This query is : Resolved
11 July 2014
A Ltd company incorporated in 2008 with the main objective of Construction bussiness.
compant borrewed fund for its business purpose but company did not start its business till 2014, companny lend this fund to its sister concern ie private company. company charged interest on that fund from sister concern and also claim interest cost in its accounts.
whether interest received on lendind fund is pre operative nature and it is allowed in IT ACT. Or
whether it is taxable under the head of Other sources
kindly mention any case law
compant borrewed fund for its business purpose but company did not start its business till 2014, companny lend this fund to its sister concern ie private company. company charged interest on that fund from sister concern and also claim interest cost in its accounts.
whether interest received on lendind fund is pre operative nature and it is allowed in IT ACT. Or
whether it is taxable under the head of Other sources
kindly mention any case law
11 July 2014
it is not the main business of lending money..so its income from other soureces.
14 July 2014
pls refer sec 28 for more details and no need for any case law on this subject matter.
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