Advances given to 5 persons without charging interest were for ...

Business advances sans interest permissible if capital suffices. Market conditions dictate business plans' viability. Consequential expenses allowed.

July 25, 2024

Case Laws Income Tax AT

Advances given to 5 persons without charging interest were for business purposes. Non-installation of machinery or renovation in subsequent period due to non-viability cannot negate the business purpose. Assessee decided not to proceed with its plan due to bad market condition, which is a valid business decision and consequential expenditure cannot be disallowed. Assessee had sufficient interest-free capital exceeding the interest-free advances, hence disallowance of interest is impermissible as per jurisdictional High Court precedents.

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Advances given to 5 persons without charging interest were for ...

Business advances sans interest permissible if capital suffices. Market conditions dictate business plans' viability. Consequential expenses allowed.

July 25, 2024

Case Laws Income Tax AT

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