1997 (1) TMI 540 - HC - Income Tax

Summary

The High Court of Bombay ruled that interest paid on borrowed money for payment of income tax is not deductible under section 36(1)(iii) of the Income Tax Act, 1961. However, interest paid on borrowed money for payment of dividends is deductible under the same section as it is considered part of the company's business. The Court referred to a previous case to support its decision.