Expenditure incurred for payment of foreclosure premium for restructuring loan and obtaining fresh loan...

Expenditure incurred for payment of foreclosure premium for restructuring loan and obtaining fresh loan at a lower rate of interest is allowable as business expenditure u/s 37(1). The pre-closure premium can be claimed as revenue expenditure u/s 37. The foreclosure of the loan to contain exorbitant charges stems from a business decision and commercial expediency governing the assessee's business dealings. An assessee can decide the best way to conduct business and maximize profits, subject to compliance with the law. The decision in Overseas Sanmar Financial Limited, where foreclosure premium was allowed as business expenditure on similar facts, has attained finality as it was not challenged by the Income-Tax Department. The High Court ruled in favor of the assessee. .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X