25 June 2013
Hi, Friends... There is a case where client has granted unsecured loans to the sister concern/related parties from the Bank overdraft account....and CC Account which is hypothetically secured against stock and other fixed assets held b an entity....
Whether there is some disallowance of interest paid on BOD Account with reference to the amount of unsecured loan.
Please provide the relevant section of Income Tax Act....
25 June 2013
The A.O. will disallow the interest claimed as business expenditure on the Unsecured Loan given On party being such expenditure not used for the purpose of business.
CAclubindia
