Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram
Income Tax - Highlights / Catch Notes

Home Highlights November 2024 Year 2024 This

Real estate development company advanced loans to its Indian ...


Indian real estate co's loan interest for funding foreign projects allowed as biz expense.

Case Laws     Income Tax

November 5, 2024

Real estate development company advanced loans to its Indian subsidiary for funding step-down foreign subsidiaries undertaking real estate projects. Interest paid on loans borrowed for advancing such loans was allowed as business expenditure u/s 36(1)(iii). Subsidiary unable to realize interest from foreign subsidiaries due to financial distress and litigation between partners. Assessee decided not to charge interest to protect business interests and principal loan amount. Loans advanced for business purposes, hence interest paid on borrowings admissible u/s 36(1)(iii) despite no interest income during the year. Appellate Tribunal upheld order allowing deduction.

View Source

 


 

You may also like:

  1. Nature of expenses - Allowability of Penal Interest paid to NOIDA - CIT(A) correctly allowed the assessee to capitalize the interest paid by the assessee to Noida...

  2. The High Court upheld the Tribunal's decision regarding the allowability of expenses incurred for garnering FCNR deposits to be maintained at the assessee bank's Indian...

  3. Disallowance of proportionate interest expenditure - capital attributable to project ‘B’ i.e. unfinished project - This interest expenditure disallowed was not related...

  4. Interest incurred claimed as a deduction u/s. 57(iii) out of interest earned from mutual funds - In our opinion, unless funds are borrowed for making deposit to earn...

  5. Disallowance of interest expenses incurred for non-business purposes - The ITAT found that the interest expenditure claimed by the assessee was allowable due to the...

  6. TP adjustment of interest - CIT(A) confirmed upward adjustment towards interest by adopting rupee loan rate instead of LIBOR linked rate in respect of foreign currency...

  7. Addition made on account of diversion of fund - disallowance of interest expenses - there cannot be any disallowance of interest expenses provided the own fund of the...

  8. Disallowance of claim of interest expenses u/s. 57(iii) - The Assessing Officer (AO) had disallowed a portion of the interest expenses based on the difference between...

  9. Determination of correct profits - percentage completion method - real estate development - when a stage is arrived that risk and rewards shift from the developer to...

  10. Disallowance of interest expenses - assessee has made contradictory submissions before the learned CIT (A) and has not furnished the required details of the interest...

  11. The circular addresses amendments to the Foreign Exchange Management (Overseas Investment) Directions, 2022 regarding investments in overseas funds. It clarifies that...

  12. Disallowance of excess interest paid - diversion of funds for non-business purposes - It is immaterial how the loan was treated by the Director - as far as the assessee...

  13. Interest income earned from funds received from Government for setting up a company is a capital receipt, not revenue receipt, as the funds and income must be utilized...

  14. Disallowance of interest expense paid u/s. 57 - nexus between the funds withdraw from the Partnership Firm and funds used for acquiring immovable property - if we apply...

  15. Annual letting value (ALV) of unsold residential units treated as stock-in-trade was added as income from house property. CIT(A) deleted the addition. High Court...

 

Quick Updates:Latest Updates