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Interest paid on capital borrowed for the purposes of the business or profession Section 36(1)(iii)

1. Deduction of expenses incurred for earning business income is spelt out in the Sections 30 to 36 of Income Tax Act, 1961. Under Section 36 of Income Tax Act, 1961, there are number of deductions available subject to the conditions laid down. In this discussion, we would take up Section 36(1)(iii) of the Income Tax Act, 1961 and analyse the provision therein from all facets, which will make us understand the deduction in a comprehensive way. In the vortex of legal pronouncements, we will analyse few case laws as well, which throw light on the grey areas that are not captured or construed in the tax legislation. The discussion is in following subheadings:

(i) Meaning and concept.
(ii) The proviso.
(iii) Issues.
(iv) Important case laws.

2. MEANING AND CONCEPT

The bare reading of Section 36(1)(iii) is as follows:
“36(1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein,in computing the income referred to in Section 28 –
( i ) and ( ii )******
(iii) the amount of the interest paid in respect of capital borrowed for the purposes of the business or profession :-
Provided that any amount of the interest paid, in respect of capital borrowed for acquisition of an asset for extension of existing business or profession (whether capitalized in the books of account or not); for any period beginning from the date on which the capital was borrowed for acquisition of the asset till the date on which such asset was first put touse, shall not be allowed as deduction.
Explanation. - Recurring subscriptions paid periodically by shareholders, or subscribers in Mutual Benefit Societies which fulfill such conditions as may be prescribed, shall be deemed to be capital borrowed within the meaning of this clause.” 

The sub section has three important words or phrases that are core to understanding of this Section i.e. 
  • (i) Interest, 
  • (ii) Borrowed and, 
  • (iii) For the purpose of business or profession. 
In the following paras we would elucidate the meaning of these with reference to this particular section.

(i) Meaning of “Interest” - The definition of “interest” in Section 2(28A) means “interest payable in any manner in respect of any moneys borrowed or debt incurred ……..”.

But for Section 36(1)(iii), “interest” is restricted to that on money borrowed and not on debt incurred. In simple words,the essence of interest is that it is a payment which becomes due because the creditor has not had his money at his disposal.

It may be regarded either as representing the profit he might have made if he had had the use of his money, or conversely, the loss he suffered because he had not that use. The general idea is that he is entitled to compensation for the deprivation.

(ii) Concept of “borrowed” – Provisions of Section 36(1)(iii) concern capital borrowed and not other debts or liability. A loan of money undoubtedly results in a debt, but every debt does not involve a loan. Liability to pay a debt may arise from diverse sources and a loan is one of such sources. The legislature has, under this clause, permitted as an allowance interest paid on capital borrowed for the purposes of the business; and the capital, in this context, means money and not any other asset purchased on credit [Bombay Steam Navigation Co. Pr. Ltd. v. CIT, 56 ITR 52 (SC)].

  • Importance of loan settlement. For the loan there must be a settlement / agreement between the parties that particular amount would be given by one party to other party. The terms would be that it would be refunded or returned either on demand or on the directions of the creditors and particular interest / no interest would be paid on the said amount. Thus, for the purpose of loan there must be interaction between the parties and there must be a concluded contract. Thus for Section 36(1)(iii) the necessary precondition is the existence of a loan transaction or a loan agreement between two parties with an established role of creditor and debtor. There is a Gujarat High Court judgment in the case of Arun Family Trust Vs. CIT 298 ITR 437 (Guj.) which brings out this fact clearly.
  • Element of refund is a must. An element of refund or repayment is a must in the concept of borrowing. If there is no obligation to refund the capital provided, interest on such capital is not deductible under Section 36(1)(iii) –Pepsu Road Transport Corpn. V. CIT 130 ITR 18 (P&H).
(iii) The phrase “for the purpose of business” – The expression “for the purpose of business” occurs in Section 36(1)(iii) and also in Section 37(1). A similar expression with different wording also occurs in Section 57(iii) which reads as “for the purpose of making or earning…… income”. 

This issue came up for consideration before the Supreme Court and the Hon’ble Supreme Court while giving judgment in the case of Madhav Prasad Jatia V. CIT, (SC) 118 ITR 200 has established that the expression occurring in Section 36(1)(iii) is wider in scope than the expression occurring in Section 57(iii). Thus, meaning thereby that the scope for allowing a deduction under Section 36(1)(iii) would be much wider than the one available under Section 57(iii). 

This phrase, as held by many legal pronouncement, is the most important yardstick for the allowability of deduction Under Section 36(1)(iii) of Income Tax Act, 1961. While explaining the meaning of this phrase the Hon’ble Supreme Court in the case of S. A. Builders Ltd. Vs. CIT(A), Chandigarh reported in 288 ITR 1 has used the word “commercial expediency”. By using this phrase Hon’ble Supreme Court has given a new dimension and clarified the concept further.

In the judgment the Supreme Court has defined commercial expediency as 
“an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The expenditure may not have been incurred under any legal obligation, but yet it is allowable as a business expenditure, if it was incurred on grounds of commercial expediency”. 

Further, following this judgment the High Court of Delhi, in the case of Punjab  Stainless Steel Inds. Vs. CIT 324 ITR 396, has further elaborated 
“The commercial expediency would include such purpose as is expected by the assessee to advance its business interest and may include measures taken for preservation, protection or advancement of its business interests, which has to be distinguished from the personal interest of its directors or partners, as the case may be. In other words, there has to be a nexus between the advancing of funds and business interest of the assessee-firm. The appropriate test in such a case would be as to whether a reasonable person stepping into the shoes of the directors/partners of the assessee-firm and working solely in the interest of the assessee-firm/ company, would have extended such interest free advances.Some business objective should be sought to have been achieved by extending such interest free advances when the assessee-firm/company itself is borrowing funds for running its business”.

Thus, for allowance of a claim for deduction of interest under this provision following three conditions are there:
  • (i) The money, that is capital, must have been borrowed by the assessee
  • (ii) It must have been borrowed for the purpose of business.
  • (iii) The assessee must have paid interest on the borrowed amount i.e. he has shown the same as an item of expenditure.
The above mentioned three conditions have been established legally by Supreme Court judgment in the case of Madhav Prasad Jatia Vs. CIT, (1979) 118 ITR 200 (SC).

3. Proviso to Section 36(1)(iii)

The proviso to Section 36(1)(iii) was inserted by Finance Act, 2003 w.e.f. 01.04.2004 relating to A.Y. 2004-05 and subsequent years. This was inserted to disallow interest on moneys borrowed for acquiring a capital asset till the date on which the asset was brought to use even if it is for extension of existing business. 

Following facts are important for consideration.
  • This proviso is to operate prospectively as held by Hon’ble Supreme Court in the case of Deputy Commissioner of Income Tax. Vs. Core Health Care Ltd. (SC) 298 ITR 194.
  • In this proviso, the word “extension” has been used which is to be taken as synonymous to the word “expansion” which is used for Sections 80IC(8)(ix) and 80IE(7)(iii)[as held in case of Nahar Poly Films Ltd. Vs. CIT, Ludhiana 201 Taxmann 304 (P&H)]. The word expansion is not different from extension of business and therefore the interest expenditure, on the utilization of borrowed funds for the acquisition of new assets, from the date of its acquisition till the date when the asset is put to use, is to be disallowed. 
  • An expenditure may either relate to a new units on expansion of existing business or it may relate to a totally new business apart from existing business. In the latter case, pre-commencement expenditure of new business would be required to be capitalized. They cannot be charged to the preexisting business. It is only for the former case, that relates to expansion of existing business, that can be allowed under Section 36(1)(iii). This was analyzed in the case of CIT Vs.Vadilal Dairy International Ltd. [2010] 328 ITR 544 by Gujarat High Court.
  • Interest paid on capital borrowed for setting up of a new unit in the same line of business – capital expenditure – Interest on capital borrowed for the purpose of acquisition of the assets of the new unit is to be allowed as a revenue expenditure only when such assets start yielding income and not for any period prior thereto – Section 36(1)(iii) to be read alongwith Explanation 8 to Section 43(1) – Proviso to Section 36(1)(iii) added by Finance Act, 2003 is merely clarificatory as it has made explicit what was already implicit. [CIT Vs. Vardhman Polytex Ltd. (P&H) 299 ITR 152.]

4. Important Issues

(I) Interest on borrowed capital used for interest free loans.

The law on this issue is settled after the Hon’ble Supreme Court judgment in the case of S. A. Builders Ltd. v. CIT (Appeals) [2007] 288 ITR 1 (SC), in which the concept of “commercial expediency” was used. Thus, where the funds of the business a diverted for interest free loans the main criteria for permissibility of interest on those funds are based on whether it was for commercial expediency or not.

The phrase “commercial expediency” has following important traits as established by case laws cited supra:

  • Such purpose as is expected by the assessee to advance its business interest.
  • May include measures taken for preservation, protection or advancement of its business interests.
  • To be distinguished from the personal interest of its directors or partners, as the case may be.
  • There has to be a nexus between the advancing of funds and business interest of the assessee. Some business objective should be sought to have been achieved by extending such interest free advances when the assessee firm/company itself is borrowing funds for running its business.
The Hon’ble Supreme Court has also delved into the case where there would be mixed fund at the disposal of the assessee. It further clarifies that under Section 36(1)(iii) the ultimate use of the fund is important. It may not be relevant as to whether the advances have been extended out of the borrowed funds or out of mixed funds which include borrowed funds. The test to be applied in such cases is not the source of the funds but the purpose for which the advances are extended.

One important case law on this issue is Punjab Stainless Steel Ltd. 324 ITR 396 (Delhi High Court), in this the hon’ble High Court has given a finding which is in favour of revenue and has clearly distinguished Munjal Sales Corp Vs CIT (SC) 298 ITR 298. In fact, the Ahmedabad Bench of ITAT has also followed this principle in Inamulhaq S. Iraki Vs.Addl. CIT, Range-2, Ahmedabad in ITA No. 243/Ahd/2011 for A.Y. 2007-08 dated 31.01.2012. In this judgment the Hon’ble ITAT has squarely followed Hon’ble Delhi High Court decision Punjab Stainless Steel Ltd. 324 ITR 396, the relevant para (11) is reproduced below for the sake of ready reference.

“We find that as per this judgment of Hon’ble Delhi High Court, where mixed funds are used for the purpose of giving interest free advances, the only relevant test is as to whether such interest free advances are due to commercial expediency or not. In the present case also, the funds are mixed funds and the assessee could not establish any commercial expediency and hence, in our considered opinion, this issue is squarely covered against the assessee by this judgment of Hon’ble Delhi High Court and respectfully following the same, this issue is decided against the assessee”.

(II) Interest on borrowing utilized for earning non assessable / exempt income.

The issue is whether to allow the interest on borrowing utilized for exempt income or non assessable income.

The primary condition for allowing deduction of interest in the computation of business income is that the interest was paid on capital borrowed for the purpose of business or profession. If the borrowed capital is utilized not in the business whose income is assessable, but in earning some non assessable or exempt income, the interest paid thereon, is not an allowable deduction under these provisions. This analogy flows from Section 14A inserted in Chapter IV of the Act, by the Finance Act, 2011 with retrospective effect from 01.04.1962, which is intended to safeguard the interest of the Revenue on account of wrong claim of expenditure relating to exempt income against taxable income. The Section 14A postulates that only expenditure which is relatable to taxable income should be deducted in computing the total income.

Hence, expenditure which is incurred to earn exempt income should not be considered in the computation of total income.

This would result in double advantage to the assessee.

Direct judgment which covers this issue is H.T. Conville Vs. CIT 4 ITR 137. Where a borrowing is specifically meant for use in a new industrial undertaking covered by Section 10B, such interest would go to reduce the eligible relief. It was, therefore, decided in Procon Systems P. Ltd. V. ITO 296 ITR 636 (Mad) that such interest cannot be reduced from eligible profits, because it has already been allowed as a business deduction.


(III) Section 36(1)(iii) vis-à-vis explanation 8 to Section 43(1) 

Section 36(1)(iii) allows deduction of the amount of interest paid in respect of capital borrowed for the purposes of business. The deduction is granted under the section, once it is established that the borrowing is for the purposes of business and that the interest is paid on such borrowings. A proviso has been inserted by the Finance Act, 2003, w.e.f. 01.04.2004, to provide that any amount of interest paid in respect of capital borrowed for acquisition of an asset for extension of existing business or profession, whether capitalized or not, for any period beginning from the date on which the capital was borrowed for such acquisition till the date on which such asset was first put to use, shall not be allowed as deduction. Interest for the period up to the date of putting the asset to its first use will not be allowed in cases of extension w.e.f. A.Y. 2004-05.

Interest for the period subsequent to the date of putting the asset to first use, is not allowed to be capitalized as part of the ‘actual cost’ for the purposes of claiming depreciation and other allowances. This is provided by Explanation 8 which is inserted in under Section 43(1) by the Finance Act, 1986 with retrospective effect from 01.04.1974.

Thus in case of an “extension” there are two facts which are evident:

1. Interest for the period prior to the first use of asset is not allowed as a deduction under the proviso to under Section 36(1)(iii).

2. For the period, subsequent to such use, cannot be capitalized for claim of depreciation as per the said

Explanation to under Section 43(1).

Thus an issue emerges in respect of the eligibility for claim of interest in cases where an asset is not put to use during the year. One view is that such interest shall be allowed once it is established that the borrowing is for the purposes of the existing business, while the other view, strongly relying on Explanation 8 to under Section 43(1), holds that interest for the period up to the date of use is not allowable as deduction. The issue is partly
resolved by the proviso in Section 36(1)(iii). Further, this issue is resolved by the judgment in Core Health Care Ltd. Vs. DCIT (SC) 298 ITR 194. In this judgment Hon’ble Supreme Court has brought out the Following interpretations for resolving the above mentioned issue:

1. Section 36(1)(iii) has to be read on its own terms. It is a code by itself. Section 36(1)(iii) is attracted when the assessee borrows the capital for the purpose of his business. It does not matter whether the capital is borrowed in order to acquire a revenue asset or a capital asset,because all that the section requires is that the
assessee must borrow the capital for the purpose of his business. There by meaning that the transaction of borrowing is not the same as the transaction of investment.

2. Explanation 8 to Section 43(1) has no relevance to Section 36(1)(iii). It has relevance only to Sections 32, 32A, 33 and 41 which deal with concepts like depreciation.

3. The provisions under Section 36(1)(iii) make no distinction between money borrowed to acquire a capital asset and a revenue asset.

From the above mentioned discussion the following can be safely concluded.

a. The interest on borrowings used for capital expenditure relating to a totally new business apart from existing business is to be capitalized as pre-commencement expenditure as held in the case of CIT Vs. Vadilal Dairy International Ltd. 328 ITR 544 (Guj.)

b. Interest paid on capital borrowed for setting up a new unit in same line of business,before it is put to use, is to be treated as capital expenditure as held in the case of CIT vs. Vardhman Polytex Ltd. (P&H) 299 ITR 152.

c. Interest on capital borrowed for the purpose of acquisition of assets of the new unit is to be allowed as revenue expenditure only when such assets is put to use and starts yielding income and not for any period prior to it following the proviso to Section 36(1)(iii).

(IV) The allowability of interest on borrowing for imprudent Investment – Does A.O.’s have power to question.

This issue relates to an assessee who borrows money at higher rate of interest and lends it to sister concern for acquiring low yield investment – Can this be allowed. This question came up for consideration in CIT Vs. Rockman Cycle Industries Pvt. Ltd. 326 ITR 291 (P&H). The High Court required reconsideration of the decision in Pankaj Munjal Family Trust’s case reported in 326 ITR 286 (P&H).

The assessee in this case borrowed moneys at higher rate of interest (18%), but advanced the same to sister concern for acquiring low-yield (4%) investment in another sister concern. 

In this case, the claim of the assessee was that, the advance at a lower rate was prompted on grounds of commercial expediency. The Assessing Officer did not question this explanation, but all the same, found that investment was not a prudent one. Commissioner (Appeals) upheld the addition on the ground that it was a case of tax avoidance. The Tribunal adjudicated the matter in favour of the assessee It held that even if it was a case of  imprudent investment, the wisdom of the assessee in choice of investments is not open to question. [The High Court found that there is no expectation in law, that the assessee’s activity should always be prudent, but all the same pointed out, that where it is not prudent, it would require to be examined, whether it is genuine.

It was this aspect, which was required to be examined, but not examined by the Tribunal.] Since the purpose
of loan to the sister company was for finding investment in low-yield non-cumulative preference shares, it was felt, that there was similar absence of enquiry on similar investment in Pankaj Munjal Family Trust’s case reported in 326 ITR 286 (P&H), so as to require reference of the case before it to a larger bench, so that the other case may also be reconsidered.

Such enquiry, it was pointed out, will still be necessary, even if tax avoidance may not be totally impermissible.

Thus following these judgments the Assessing Officer can question the wisdom of assessee in choice of investment and whether the investment was genuine or not.

(V) Interest on borrowings for purchasing shares

Under this topic the discussion is further sub-divided in following three sub headings i.e. (a) Section 36(1)(iii) vis-àvis Section 57(iii), (b) whether dividend on preference shares can be equated with interest on borrowed capital and (c) the case of Circular trading.
  • (a) Section 36(1)(iii) vis-à-vis Section 57(iii)
Where borrowings are made for purchase of shares, question often arises whether interest paid should be allowed as deduction under Section 36(1)(iii) or under Section 57(iii). Here it would be worthwhile to mention that income by way of dividends on shares, whether held on investment portfolio or as stock-in-trade, is specifically assessable, under Section 56(2)(i), as “Income from other sources”. Where the shares are held, although on investment portfolio, as an integral part of business,interest on such borrowings is allowable under Section 36(1)(iii). Thus, the qualifying factor in this case is to ascertain whether the borrowings for purchasing shares is an integral part of business of assessee. 

Interest can be allowed under Section 36(1)(iii) only if the assessee proves that it was for the purpose of business. 

But if the shares are acquired not as an investment for earning income therefrom, the inference may well be different as was found in CIT Vs. Amritaben R.Shah 238 ITR 777 (Bom), where it was held that a taxpayer borrowing money to acquire controlling interest in a company would not be entitled to deduction of interest on borrowings. In coming to the conclusion, the High Court followed precedents which are worth noting. The Gujarat High Court in Sarabhai Sons (P) Ltd. V. CIT 201 ITR 464, found that where the dominant purpose of expenditure is not for earning income, it could not be allowed as a deduction. In Chinai and Co. Pvt. Ltd. V. CIT 206 ITR 616 (Bom), expenses incurred in fighting another group of shareholders to protect investments in erstwhile managed company was held to be not admissible as business expenditure.
  • (b) Whether dividend on preference shares can be equated with interest on borrowed capital. 
From the provisions of Sections 85 and 205 of the Companies Act, 1956, it is clear that the preference share capital is a contribution to the capital of the company by its subscribers or shareholders and is not a ‘borrowing’ by the company subject to payment of interest. Similarly, for the very said reason the dividend which is paid to such shareholders is to be paid only out of the profits earned by the company. 

In common parlance, it can be equated with the share income derived by the shareholders out of the profits of the company. Therefore, by no stretch of imagination the dividend sought to be paid can be equated with or treated as ‘interest’ paid on the borrowed capital. In that view of the matter, the assessee-company is not entitled to deduction of the liability on account of dividend on preference shares by invoking the provisions of Section 36(1)(iii). [Kriloskar Electric Co. Ltd. v. CIT,228 ITR 674, 676 (Karn); Kirloskar Electric Co. Ltd. v. CIT,228 ITR 676, 678 (Karn)].

  • (c) The case of Circular Trading 
Interest on borrowed capital for purposes of business is a deductable expenditure under Section 36(1)(iii), where the assessee is dealing in shares. But what happens when it is proved that the borrowings were merely
an arrangement by way of circular trading solely with a view to avoid tax. This issue was examined by Supreme Court in CIT Vs. Ashini Lease Finance P. Ltd. 309 ITR 320 (SC) whereby the decision given by Gujarat High Court was set-aside by Hon’ble Supreme Court. In this case, the assessee, borrowed funds from the concerns in the same Torrent group for purchase of equity shares of AEC. During the relevant year, the total investment made by the assessee in the take over and acquisition of business of AEC amounted to only Rs. 22,59,969. In addition, the Assessing Officer also found that after acquiring the shares of the company by the group, the same shares of AEC were sold at Rs. 63,57,925 and ultimately AEC Ltd. had been taken over by the Torrent group. The record indicated, prima facie, that the assessee-company had acquired the shares of AEC, through finances arranged mainly from the Torrent group (sister companies) along with two other companies only to enable the Torrent group to acquire and take over the business of AEC.

It was on these facts, the prima facie inference was that it is not a normal trade borrowings, but merely an arrangement by way of circular trading solely with a view to avoid tax. The Supreme Court, therefore, felt that the High Court was not justified in holding that the Tribunal in allowing the deduction had taken a decision on the facts, and that there was no substantial question of law for determination by the High Court. There was a substantial question of law in the light of the inference drawn from admitted facts. The issue was sent back to the High Court for a decision in accordance with law. Thus, if there is a case where it can be proved that the borrowings made are not part of normal trade borrowings and it is merely an arrangement by way of circular trading among companies under the same group, then interest on such borrowings can be disallowed.

(VI) Interest on borrowed capital in the case of Firms.

This issue arises in the case of Firms whereby Section 36(1)(iii) is to be read with Section 40(b)(iv). In this case, if the assessee is a Firm, then to claim deduction in respect of interest paid on capital borrowed from third party (apparently partners), the Firm is required to established two things:
  • 1. It is entitled to claim deduction under Section 36(1)(iii), and
  • 2. It is not disentitled to claim such deduction on account of applicability of Section 40(b)(iv).

It is important to note that Section 36(1) refers to ‘Other Deductions’ whereas Section 40 comes under the heading ‘Amounts not Deductible’. Therefore, Sections 30 to 38 are for ‘Other Deductions’ whereas Section 40 is a limitation on that deduction. It is important to note that Sections 28 to 43C essentially deal with Business Income. Sections 30 to 38 deal with Deductions. Sections 40A and 43B deal with Business Disallowances. Keeping in mind the said scheme the position is that Sections 30 to 38 are deductions which are limited by Section 40. Therefore, even if an assessee is entitled to deduction under Section 36(1)(iii), the assessee (firm) will not be entitled to claim deduction for interest payment exceeding 18/12 per cent per se. This is because Section 40(b)(iv) puts a limitation on the amount of deduction under Section 36(1)(iii ) [Munjal Sales Corp Vs CIT (SC) 298 ITR 298].

(VII) Distinction between Sections 36(1)(iii) and 37(i)

Section 37(1), which is a residuary general provision, may  have application to any expenditure (including interest) which is not of the nature described in Sections 30 to 36. To an extent, Section 36(1)(iii) and Section 37(1), so far as the allowance of interest is concerned, run parallel to each other. But later, they do differ and it can then be discerned whether a given case falls within the phraseology of Section 36(1)(iii) or Section 37(1). Comparing the two, we may see –


Sr No
Section 36(1)(iii) 
Section 37(1)
1
It must be interest on capital (moneys) borrowed.
It may be interest even on any debt incurred.
2
The borrowings must be for the “purpose of the business”.
The debt incurred must be and exclusively for the purposes of the business.
3
The borrowed amount may be utilized for even procuring a capital asset related to the business
The debt incurred must not utilized for procuring a capital asset so as to fall within the gamut of “capital expenditure”

One thing is certain that there can be no double deduction once under Section 36(1)(iii) and again under Section 37(1)  for one and the same amount of interest.

(VIII) Burden of Proof

The burden of proving, that the moneys borrowed has not been utilized for non business purpose and the lending has all ingredients of “commercial expediency”, is on the assessee. 

There are various case laws which supports this contention viz. CIT Vs. Coimbatore Salem Transport P. Ltd.61 ITR 480 (Mad), Indian Metals & Ferro Alloys Ltd. Vs. CIT,193 ITR 344 (Ori), CIT Vs Abhishek Ind (P&H) 286 ITR 1. In the case of R. Dalmia Vs. CIT 133 ITR 169 (Del.) the Hon’ble High Court decided that 
“Where the interest paid concerns the borrowed money for business as well as non business purposes, the claim may be disallowed in its entirety if no adequate material is adduced by the assessee to determine that portion of interest which pertains to business purposes”.
(IX) The extent of disallowance under Section 36(1)(iii)

The Assessing Officer is often confronted with a question as to the extent of disallowance when it is proved that the borrowings were utilized for non business purposes. In such situations, there could be two possible scenario : 
  1. Where there is only borrowed fund and no composite or mixed fund. In such cases, the disallowance is to be made at the full rate of interest payable on such borrowed money. The amount of interest, if any, realized from such utilization is not to be taken into account for ascertaining the extent of the disallowance [CIT Vs. India Silk House, 152 ITR 79 (Mad)].
  2. Where there is composite or mixed fund, in such a case, the Assessing Officer is required to co-relate between the nature of feeding fund with utilization of such fund. After this co-relation the Assessing Officer may devise methods based on factual analysis of the source of fund with the utilization of fund to arrive at the figure of part disallowance of interest expenditure. 
  3. In this case, there cannot be full disallowance of interest payable by the assessee. Where the funds are mixed up, so that it is not possible to identify the extent of borrowings utilized for such loans, proportionate amount could be disallowed as held in K. Somasundaram and Brothers Vs. CIT 238 ITR 939 (MAD). 
(X) No allowance for pre-commencement interest
 
Section 36 falls within the code for computation of business income. Unless a business is actually commenced, no deduction under these provisions can be claimed in respect of interest on moneys borrowed for the period prior to such commencement [Ritz Continental Hotels Ltd. v. CIT,114 ITR 554(Cal)].

(XI) No allowance in case of cessation of business

Where the business has ceased to be carried on, no deduction can be claimed in respect of interest on borrowings [Assam Biscuit Mfg. Co. Ltd. v. CIT,185 ITR 535 (Gauh)].

(XIII) No allowance on sham or colourable transactions.

It is true that an assessee is entitled to arrange his affairs in such a way as to reduce his tax liability by all legal ways but the arrangement ultimately adopted must be genuine and not sham. If the object of the borrowing was illusory or colourable and not genuinely for business purposes, these provisions will have no application [Govan Bros. v. CIT, (1963) 48 ITR 930, 941 (All)].

(XIII)The Companies Act, 1956

It would be worthwhile to examine the provisions in the Companies Act, 1956 with regard to loans to sister concerns / companies under the same management. The Companies Act, 1956 deals with this issue in Section 370, 370A and 371. In fact it lays down very stringent conditions for making any loans to companies under the same management. The relevant part of Section 370 is reproduce to give an idea about the provision whereby it says that 
“…………any body corporate, unless the making of such loan, the giving of such guarantee or the provision of such security has been previously authorized by a special resolution of the lending company………”. 
Thus it talks about making special resolution before giving any loan to related companies.
Further, Section 371 deals with penalty for contraventions to any conditions given in Section 370. Thereafter, Section 372A deals with Inter-Corporate loans and investments.

It would be not out of place to take strength from these provisions to make good assessments.

5. Important Case Laws

The following are some important case laws apart from what is discussed in above paragraphs. The illustrations give out cases in favour of revenue where interest on borrowed capital was held not allowable.
  • (i) Bombay Steam Navigation Co. P. Ltd. V. CIT 56 ITR 52 (SC).Payment of interest by a company on unpaid price of the assets taken over is not an affordable expense.
  • (ii) Lachhiram Puranmal Vs. CIT 119 Taxman 1 (MP) Interest paid on borrowed capital was held not deductible where such capital was utilized for the purpose of agricultural land which was admittedly not a business investment. 
  • (iii) Malwa Mills Karmchari Paraspur Sahkari Sanstha Ltd. Vs. CIT 140 ITR 379 (MP). Assessee having two units, A and B, made advances from unit A and unit B. Interest debited in unit B held not allowable because the entity was the same. 
  • (iv) CIT Vs. Ahmedabad Mfg. & Calico Printing Co. Ltd. (Guj.) 215 ITR 735 Payment of betterment charges is capital expenditure. Therefore, payment of interest on annual installments of the betterment charges will have to be regarded as capital expenditure, because it has no direct nexus with the day-to-day running of the business of the assessee.
  • (v) East India Pharmaceutical Works Ltd. Vs. CIT (SC) 224 ITR 627 The interest that is paid by the assessee on any sum  borrowed by him for payment of income tax is not deductible from his net income since it is only application of profits and not expenditure incurred to earn profits. 
  • (vi) Saraspur Mills Ltd. Vs. CIT (Guj.) 226 ITR 533 Interest paid for late payment of Income Tax is not deductible as it is not incurred for the purpose of carrying on of the business. The interest takes colour from the nature of the principal. 
  • (vii) Auto Sales Vs. CIT 227 ITR 790 (All) Interest on gifted amount remaining with the assessee firm in the name of the donee to whom gift was made by book entries and the donor partner not having sufficient credit balance to his account, held not allowable because such a transaction of gift could not be treated as a genuine one. 
  • (viii) Bharat Commerce and Industries Ltd. Vs. CIT (SC) 230 ITR 733 For VDIS Tax paid in installments with interest, the interest is not deductible as business expenditure or as interest on borrowed capital. 
  • (ix) Saswad Mali Sugar Factory Ltd. Vs. CIT 236 ITR 706 (Bom) Interest on capital for purchase of machinery, which was leased out and income therefrom was assessed under the head “Income from other sources”, was held not deductible under Section 36(1)(iii) in view of the finding recorded by the Tribunal that the assessee’s intention was not to carry on business, but to let out the business assets as income yielding properties.
  • (ix) CIT Vs. Indian Express Newspaper (Madurai) P.  Ltd. 238 ITR 70 (Mad). Interest paid on amount borrowed by the assessee company and transferred to the investment company floated by it which in turn transferred to same to an associate company of the assessee company which was engaged in the construction of a building was held not deductible because the borrowed amount was not used for the purposes of the assessee’s business.
  • (xi) CIT Vs. Ramkant Mishra 252 ITR 210 (Cal.) Interest on cash credit, which have not been explained, has been held not allowable in spite of the fact that no addition was made on account of unexplained cash credit. 
  • (xii) JCT Ltd. Vs. DCIT (Calcutta) 276 ITR 115 Section 36(1)(iii), read with Sections 43(1) and 37(1), of the Income-tax Act, 1961 - Interest on borrowed capital - Assessment years 1987-88 and 1988-89- Whether interest paid on borrowed capital under deferred payment scheme for acquisition of plant and machinery for period relevant till asset was first put to use would not be eligible for deduction under Section 36(1)(iii) or Section 37(1) since it is includible in actual cost of acquisition of asset till asset was first put to use, in view of Explanation 8 to Section 43(1) - Held, yes.
  • (xiii) CIT Vs. Swapna Roy (All) 331 ITR 367 Borrowed funds were invested in financially fragile sister concerns. The court held that there was no intention to earn income but merely to assist sister concerns. Deductions of interest paid on such borrowings is not allowable.

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SECURITIES 01.07.12 01.09.2008 01.10.2012 06.07.2009 07.08.2012 1 PERCENT EXCISE ITEMS LIST 1 sep 1% excise 10 year nsc 10(10C) 1000 court cases judgements supplied to ITO 1000 rupee note 11-2008 11-2010 130 items 14.08.2008 15 august 150 Rs coin 15g 15h 18-12-2009 192(1A) 192A 194 I 194A 194c from 01.10.2009 194H 194j 194LC 1981-2007 2% cst 2% excise 2004 2008 2008-09 FY 2010 206AA 234A 234B 234C 234c interest calculator 234E 23AC 23ACA 23B 24C 24q annexure II 25 paisa coin 271(1)(c) 271B 271H 272B 27A 280 280 challan 281 282 283 29 AUGUST 29.04.2010. 29/08/2008 29/2008 service tax 2g meaning use 3 idiots 30 MARCH 31st March 32-2010 33 of 2009 35(2AA) 35(2AB) 3CD 3g meaning use 40(b) 43B 44 AB EXEMPTED INCOME 44AB AGRICULTURE 44AB new limit 44AB NON RESIDENT 44ad 46/2012 45/2012 49C 5 day week 5 years post office deposit 5/2011 50 paisa coin 54b 54EC 54f 5th paycommission punjab 6 % excise 6 crore advance limit 6/2005 69/2010 6th cpc 6TH PAY COMMISSION 70% of pan etds 7th Central Pay Commission 8 tips to save tax 80C 80ccc 80CCD 80cce 80CCF 80CCG 80d 80DDB 80EE 80G 80GG 80GGA 80GGB 80ggc 80tta 80U 85% of pan etds 86/2008 DATED 13-08-2008 87A rebate 89(1) 89(1) relief calculator 9.5 % rate for private epf 92E 95% of pan etds 98 dated 04/01/08 ` aadhaar aakash tablet aam admi aar abatement abolished ACCOUNT PAYEE DRAFT Accounting ACCOUNTING CODE accounting code for services ACCOUNTING FOR GOVT GRANTS accounting standards ACES ADD IN Add-Ins additional relief in budget 2010 adjustment of advance FBT with advance Tax advance rullings advance salary ADVANCE TAX CALCULATOR advance tax challan ADVANCE TAX CUT OFF AMOUNT ADVANCE TAX DATES AFFIDAVIT AG Projects Technologies Ltd RT age 80 addition pension aibea wage revision aibea wage revision latest news aiboa aiboc aiboc wage revision AIG AIR airline ticket booking tds airlines all is well allowances allownces alphabet of inspiration alteration on check allowed alternate minimum tax AMENDED 3CD amendment in companies bill 2011 amendment in gratuity act 2010 amendment in registration service tax AMENDMENT IN SERVICE TAX ON RENT amendment to finance Bill 2010 AMNESTY SCHEME 2007 amt Anna Hazare anna hazzare bill vs govt lokpal bill appeal apply for new pan card against old pan card aqb arbitration arrears of salary arrears of sixth pay ARRERS TAX AS-12 ASBA assessee in default ASSESSMENT REOPENING ASSESSMENT YEAR 2008-09 REFUND atm atm 100 per day atm cash without card atm tips atm wrong debit audit cases itr filing audit limit enhanced Audit Questionaire AUDIT REPORT AUS VS IND.INDIA VS SL Automated teller machine AUTOMATION OF CENTRAL EXCISE AND SERVICE TAX ay 2010-11 bad debts Bank Bank account bank audit bank audit 2012 bank charges BANK SALARY bank strike 06/07/09 and 07/07/09 banking law amendment banknotes banks npa provisioning BARE ACT bare rules BASE RATE BY BANKS bcct BIMAL JAIN biometric pan card black and white form not acceptable black money BLOCK PERIOD blogging bobay refund BONUS bonus 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GAIN INDEX capital gain on repayment of loan capital gain on tenancy rights capital goods capital revenue CAPITAL SUBSIDY CAR LOAN RATE INCREASE carry forward of losses in late return cas cash flow statement CASH PAYMENT DIS ALLOWANCE CASH PAYMENTS EXCEEDING 20000 CASH SUBSIDY cbdt cbec CBI ARRESTED centeral sales tax rate CENTRAL PAY COMMISSION CENTRAL PROCESSING CENTER CENTRALISED PROCESSING OF RETURNS Cenvat CENVAT Credit Rules cgas 1988 challan challan 281 CHALLAN 289 challan correction challan Form 17 CHALLAN STATUS INQUIRY change in cst rate change in excise duty rates CHANGE IN PAN ADDRESS CHANGE IN PAN DATA change in tds rates in budget changes CHANGES IN SERVICE TAX ACT changes in new itr forms CHANGES IN TDS CHARGES ON CASH PAYMENT OF CREDIT CARD BILL charitable organisation check name from PAN check tds deducted online Cheque cheque bounce cheque payment before due date cheque tender date /realisation date Cheque Truncation CHEQUE VALIDITY child care leave CHILD DEPENDENT 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Emilio Ruiz Berdejo (2010) 320 ITR 190 (Bom.) cloning of atm card clubbing of income COLLECTION CHARGES COLOR SCHEME COMMISSION ON SMALL SAVINGS common error in 2009-10 common error in itr 4-5-6 compa companies bill 2012 COMPANIES RATE COMPANY BILL 2011 company deposit Company Law Settlement Scheme COMPANY REGISTRATION complusory payment of taxes Composition scheme service tax COMPUTER AS FAX MACHINE computer sytem at ito office CONCEPT PAPER configure yahoo mail in outlook express consolidate account statement construction purchase of house Consultancy Service Consumer Price Index continues services CONTRIBUTION TO NEW PENSION SCHEME CONTRIBUTORY PENSION FUND CONVERT FIGURES INTO WORD EXCEL COPARCENER CorpMcash corporation bank correction etds CORRECTION IN PAN DATA correction in section CORRECTION RETURN CORRECTION RETURN.ETDS cost accounting cost audit cost inflation index cost inflation index 2012-13 COST INFLATION INDEX FY 2010-11 COST INFLATION INDEX FY 2011-12 COST OF INDEXATION CALCULATOR court case in entry tax punjab cpc phone number cpf Credit card CREDIT CARD BILL PAYMENT ICICI BANK credit scores cricket team critical illness CROSSED DEMAND DRAFT CRR crr reducred CS DIVESH GOYAL CST CST 3% OR 2 % cst act 1956 cst form CST FORM STATUS cst rate changed CST REDUCE RATE ctt currency CURRENCY TRADING ILLEGAL custom custom changes in budget cusual leave DA MERGE da rate da rate 01.07.2012 da rate january 2013 da rate july 2012 da rate wef 01.01.2012 date extension DDO ASK RENT RECIPT ddt dearness allowance Debit card DEBT EQUITY RATIO debt funds debt trap declared goods DEDUCTION 80C deduction for higher studies deduction on saving bank interst deduction u/s 80DD Deemed income of employee deemed services defective return defence officers defence pay defence pay scales DELAY IN FILING delete ledger in tally DELHI HIGH COURT demat deposit tax of two quarter in single challan depreciation depreciation on car depreciation on commercial vehicle. DEPRECIATION ON INTANGIBLE ASSETS depreciation rate depreciation rate 2009-10 DETAIL AFTER E FILLING DETAIL OF TIN Determination of value DIFFRENT TYPE OF TAXES digital signature din direct payment in bank account DIRECT SUBSIDY direct tax bill direct tax changes in budget direct tax code direct tax code 2009 Disability insurance discussion Paper distribution of salary dividend distribution tax dividend striping dnd do not call. document identification number document ientification number documents required for service tax registration domestic transfer pricing donation dot double taxation dow jones download download 89(1) relief calculator download direct tax code 2012 download form 16A download fvu download idfc INFRA BONDS FORM draft reply drawback rates dtaa dtc DUE DATE AY 2010-11 due date ay 2011-12 due date extended due date extended to 31.08.2012. due date for service tax return due date form 16 due date form 16a due date June due date march tax due date of return 2008-09 due date pf esi due date to deposit tds DUE DATES DUE DATES CALENDAR DUE DATES CALENDER DUE DATES INCOME TAX DUE DATES SERVICE TAX DUE FAMILY PENSION DULICATE PAN DUPLICATE TAN dvat e book Income Tax rules e book on service tax E ERA OF TAXES e filing do and don'ts e filing of audit report e filing processing status e filing software excel free e filing through evc e filing utilities e mode for notice to shareholder e notice to share holder e payment of epf E PAYMENT OF EXCISE DUTY e payment of income tax E PAYMENT OF SERVICE TAX e payment of tds E STAMP DUTY e tutorial for TAN registration E-1 FORM E-1 SALE e-commerce E-FILE SERVICE TAX RETURN e-Intermediary e-payment from friends account E-PAYMENT OF SERVICE TAX e-payment of taxes E-SEVA BY ICAI e-TDS/TCS statements earn from home earned leave Easy Exit Scheme ebay EBOOK EBOOK ON SERVICE TAX economic survey economic survey 2010 economic survey 2011 economic survey 2012 Edible Oils EDITABLE INCOME TAX FORM education cess EDUCATION LOAN eet EFFECTIVE DATE CST RATE REDUCTION effective date of allowncs efiling errors efiling free efiling income tax return efiling of excise return efiling registration problem Electricity act ELECTRONIC FOREX TRADING Electronic Verification Code (EVC) elegent card on holi ELSS EMANAGEMENT OF TAXES EMI CALCULATOR empanelment as branch auditor EMPLOYEE PROVIDENT FUND employee state insurance employee state insurance act 1948 employee state insurance act Limit employer e sewa eMudhra Consumer Services entries r off in 50 paisa entries rounded off in rs ENTRY TAX entry tax punjab epf epf challan epf claim epf e passbook EPF FAQ epf int rate 11-12 epf interest exemption epf interest rate epf interest rate for fy 2010-11 epf limit epf online EPF ONLINE CHALLAN GENERATION epf statement EPF TRUST epf withdrawals epfo equal monthly installments equity funds ER-1 ER-2 er4 form online error in etds return error in st-3 esi esi contribution esi limit 10000 esi limit 15000 esi limit from 01.05.2010 esi return ESOP ETABF ETAX etcs etds etds correction etds defualts etds due date ETDS FVU 3.1 ETDS PAYMENT ETDS Q4 ANN II etds retur with insufficient pan etds return ETDS RETURN DUE DATES etds return less deduction of tax. 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TAX ACT INCOME TAX ACT EBOOK income tax act tds 194C Income tax benefit in budget INCOME TAX CALCULATOR INCOME TAX CALCULATOR 09-10 income tax calculator 12-13 Income tax calculator 2011-12 income tax case selection income tax changes in budget 2010 income Tax circular income tax circulars from 1961 income tax code 2009 income tax due date extended INCOME TAX FORM FILLABLE income tax forms income tax help tool bar income tax notice on late deposit of tds Income tax notification income tax notification from 1961 income tax office income tax payment through atm income tax rate chart. i tax rates 12-13 income tax rates after budget 2012 income tax rates fy 2013-14 income tax refund income tax return income tax return 2011-12 INCOME TAX RETURN 2015-16 income tax return due date INCOME TAX RETURN EXEMPTION income tax return form INCOME TAX RETURN FORM 12-13 INCOME TAX RETURN FORM EXCEL income tax return form itr-2 income tax return last date Income tax rules INCOME TAX SLAB income tax slab in dtc income tax slabs INCOME TAX SLABS AFTER BUDGET income tax ules 9th amendment INCOME WISE ITR FORMS INCOMETAX 6TH PAY inconsistancies in etds returns inconsistencies in etds returns INDEMNITY BOND India against corruption india budget INDIA VS AUS India win world cup INDIAN BANK CHARGES INDIAN INCOME TAX CALCULATOR 2007-08 indian rupee indirect tax proposals INDIVIDUAL HUF TAX RATES indusind bank INFLATION INDEXED NATIONAL SAVING SECURITIES infosys infra bonds limit increased infrastructure Bonds inoperative accounts INPUT SERVICES instruction no 9/2010 INSTRUCTION TO FILL ITR-2 Insurance insurance claim Insurance policy intangible assets INTER BANK MOBILE TRANSFER inter haed loss adjustment interest interest free laon Interest from bank interest on borrowing capital INTEREST ON HOUSE LOAN INTEREST ON LATE DEPOSIT INTEREST ON LATE GRATUITY PAYMENT interest on ppf account interest on self occupied house interest on small savings interest rate on late deposit interest rate on tds 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(154 ITR 148) meaning of transfer in capital gain meanings of finance terms medical insurance premium MEDICAL OFFICER medical u/s 80D MEET MENREGA merge ledger in tally MICR CODE Microsoft Microsoft Excel military pay minimum alternative tax minimum balance minimum experiance for bank branch auditor minimum experience for bank branch auditor minimum service minimum wages mip mis matching MISTAKES IN ETDS RETURN mistakes in itr mistakes in return filling Mobile Number Portability Money MONEY MATTERS CASE Money Mistake monthly income plans monthly income scheme MOTOR INSURANCE MRTP ms excel MS OFFICE multipal challan multiple pan Mutual Fund mutual funds and tax MVAT AUDIT mvat audit form 704 Nabard Bonds name break up in pan nandan nilekeni NATIONAL ELECTRONIC FUND TRANSFER National Identification Authority NATIONAL SAVING CERTIFICATE NAV NEFT NEGATIVE LIST FOR TAX ON SERVICES Net asset value net banking new excise return form new 194 c NEW BASE RATE INTEREST NEW BASIC AND GRADE PAY new basic formula new coin new cut off limit for TDS new da rate new deduction NEW EST-1 new etds requirement NEW EXCISE DUTY ITEMS New Foreign Trade Policy NEW FORM ITR FY 2010-11 new fuv 2.110 new fvu 2.128 new income tax act new income tax calculator NEW INCOME TAX RATES new income tax return form 2010-11 itr-1 new income tax return form 2010-12 itr-1 New Infosys Chairman new itr form NEW ITR FORM AY 2011-12 new itr forms NEW ITR FORMS EXCEL new jeewan dhalan NEW PAN APPLICATION NEW PAN CARD NEW PARTNER ADDED NEW PAY BAND NEW PAY SCALE FOR UNIVERSITIES COLLEGES NEW PAYSCALE FOR PROFESSOR LIBRARIAN DPE new pension scheme to govt employee NEW RUPEE SYMBOL new rupee symbol font new sahaJ tax form new section 44AF new service tax rate 12.36 NEW SERVICES UNDER SERVICE TAX new tax form NEW TAX RATES new tds rate 2010-11 new tds rates fy 2009-10 new tds rules applicable. NEW TDS RULES FY 2010-11 New Year's Day newly weds nhai bonds nhai capital gain bond nhai tax free bonds nifty nil etds challan nil etds return nil tds on transportor no return for salary No.402/92/2006-MC (10 of 2008) non deduction certificate non deposit of TDS non performing assets NON RESIDENT INDIAN NOR note security features NOTES ON 3CD notice of meeting through email company notice pay notices etds notification 19/2008 service tax Notification 19/2009-ST notification 22/2011 notification 23/2011 notification 24 NOTIFICATION 25/2012 Notification 26/2011 notification 3-2011 notification 32/2009 dated 27.03.2009 NOTIFICATION 36/2011 NOTIFICATION 41 DT 31.05.2010 notification19.03.2012 npa norms NPS NRI nri investment indua NRI.PIO NSC ACCRUED INTEREST NSC INTEREST CALCULATOR nsc. NSDL NSE NUMBER TO TEXT numbers in to text OCI official notification official website oltas one increment ONE RANK ONE PENSION one thousand rupee note online ONLINE BALANCE CHECK EPF online bsnl bill verification online deposit of tax online earning online emi calculator online employee provident fund online epf balcnce online filing of service tax return ONLINE FOREX TRADING online life insurance ONLINE PAN online pan verification online rectification itr online refund ONLINE REFUND STATUS ONLINE REGISTRATION OF COMPANY online return rectification online service tax online services by Govt ONLINE ST-3 online tan regsitration online tds payment ONLINE VAT opc option date other forms other income to employer out of debt OUTPUT SERVICE TAX CREDIT OUTSTATION CHARGES own name PACKAGE SOFTWARE PAN PAN ADDRESS pan and income tax return PAN AO CODE pan application excel pan correction pan details PAN LEDGER pan login pan mandatory for hra pan mandatory in etds pan name verificatio PAN ON RENT RECIPT pan regsitration PAN STATUS NSDL PAN STATUS UTI PAN STRUCTURE PAN SURRENDER pan transfer pan verification pan vs return parcel PARNERSHIP part time course tuition fees part of the year employee form 16 part of the year employee form 24q partial reverse charge in service tax partial withdrawal partner salary PARTNERSHIP DEED PARTNERSHIP RATES PASSWORD PATENT pay bands Pay calculator pay calculator revised pay commission punjab pay fixation examples pay per post PAY SERVICE TAX ON DUE BASIS payable at par paybands PAYMENT BY ACCOUNT PAYEE CHEQUE payment by cheque income tax payment due date reminder payment exceeding 20000-35000 payment of gratuity act paypal paypal ceiling PDF UTILITY penalty for service tax penalty if cheque cleared late penalty on concealment of Income penalty on late filing non filing of etds return penalty on late filing of income tax return pension pension arrear pension calculator pension da pension fitment pension gazette notification pension notification pension on grade pay military pay pension policy pensioner benefit Permanent account number PERSONAL ACCIDENT INSURANCE personal finance software personal loan PETROL DIESAL SAVE FISCAL DEFICIT PETROL DIESEL PRICE HIKED PETROL EXPENSES VALUATION petrol prices reduced PFC PFC INFRA BONDS PFC TAX FREE BONDS pfrda PHONE BANKING phone password pin pivot tables Place of Provision of Services Rules PLAYER AUCTION pmjdy PMS pnr Point of sale POINT OF TAXATION political party deduction Poppy Seeds portfolio POST GRADUATE TEACHER post office fixed deposit post office recurring deposit post office saving deposit account post office schemes postal ballots postal order POWER FINANCE BONDS POWER OF ATTORNEY PPF PPF CALCULATOR ppf huf account ppf interest rate ppf limit ppp ppt ppt fbt ppt on budget 2011 PPT UP VAT pranav mukharjee pre construction interest PRE EXISTING E-1 TRANSACTIONS pre filled challan income tax prepayment prepayment penalty press release press release 14.08.2008 presumptive tax scheme preventive health check up PRIMARY TEACHER PRINCIPAL printing manual private limited company PROF. TAX profession tax PROFIT RATE UNDER 44AF provident fund dues PROVISION OF FBT ON ESOP provisioning of npa PSPCL PSTCL PSU PAY HIKE public limited company public provided fund PUBLIC SHARE HOLDING IN LISTED COMPANY punjab govt arrear calculator PUNJAB VAT punjab vat notification purchase of residential house pure agent qfi quarterly statement status rail freight railway budget railway budget 2012 railway ticket RAILWAYS BUDGET 09-10 RAILWAYS BUDGET 11-12 rajiv gandhi equity saving scheme RAJKUMAR S ADUKIA ramalingam Rate of return RATES AFTER BUDGET rates of service tax rbi RBI ACT RBI Circular on e-payment of taxes RBI FALSE CALLS RBI FALSE MAIL RBI INSTRUCTIONS GAR-7 RBI MONETARY POLICY rbi monetary policy 2012 RBI NOTIFICATIONS rbi report on customer services ready reckoner income tax REAL ESTATE Real Estate Investments REAL TIME GROSS SETTELEMENT reason for mis matching REBATE ON INPUT GOODS AND SERVICE REC Bonds rec infra bonds rec tax free bonds recent rectification of return online reducction in crr refinance calculator refund refund due to diff in valuation of perquisites refund of service tax on cancellation of tickets refund pilot scheme refund without matching registration charges tax saving RELIANCE COMMERCIAL FINANCE RELIANCE GOLD LOAN RELIANCE LIFE INSURANCE RELIANCE MUTUAL FUNDS relief calculator 2010-11 relief calculator fy 2011-12 REMUNERATION TO PARTNERS RENT rent a cab RENT RECIPT RENTING OF IMMOVABLE PROPERTY AFTER 01.07.2012 RENTING OF IMMOVABLE PROPERTY AFTER BUDGET 2010 repayment of housing loan REPLY TO CPC FOR NOTICE REPO RATE Reserve Bank of India reset password RESIDENTIAL STATUS RESOLUTIONS RESTAURANT restricted leave retail investor retirement planning retirement steps Retiring early retrospective amendment RETURN EXEMPTION SALARIED CLASS UP TO 5 LAKH RETURN FILING DATES return filing in odd conditions return for contractors tax deducted return not required with pan return of income RETURN PROCESSING RETURN UP TO 5 LAKH RETURN UPTO 5 LAKH REVENUE STAMP ON CHEQUE PAYMENT REVENUE STAP ON RECEIPT reverse charge on works contract reverse charge of service tax reverse mortgage reverse of 80C benefits REVERSE REPO RATE REVISE RETURN revised option date revised pay calculator revised return REVISED SCALE rgess rich right to reject RPF rpu rpu 1.7 rpu 2.2 rpu 2.5 rpu 2.7 RPU 3.00 rpu 3.1 RPU ITR 2011-12 rpu2.8 RTGS rti rti fees rule 12 of income tax return. RULE 2A rule 4A rule 6(4A) rule 6(b) rule 6DD rule3 rule40BA RUPEE SYMBOL s safety tips for atm SAHRE SHORT TERM CATIAL GAIN salary calculator SALARY ETDS Q4 salary in new direct tax code salary structure salary tds sale in transit sale of agriculture land SALE OF DEBENTURE sale of residential house SALES MEANING 44AB Sales tax samsung case saral 2 saral II SARAL II IN EXCEL Satyam Satyamevjayate SAVE TAX SAVING ACCOUNT saving bank interest saving bank interest rate saving linit u/s 80c saving more than income SAVING PASSBOOK sbi 9.75 % bonds SBI bonds sbi home loan SBI interest rates sbi net banking sbi rates SBIOAHC SCAM schedule VI companies act SCOPE OF ETDS STATEMENT SCOPE OF SERVICE ENLARGED SCOPE OF SERVICES WIDENED scrutiny fy 11-12 scrutiny selection search income tax seat wise/constituencies wise and party and party candidate wise latest position sebi SEC 194 C SEC 194 I sec 194 J secion 80c SECRETARIAL STANDARD secrutiny of itr section 10(10AA) SECTION 10(13A) section 10(38) SECTION 10(5) section 139(1) section 139(4) section 139(5) Section 14 SECTION 145 section 154 return online income tax section 16(iii) section 189 section 192 section 194-J SECTION 194A section 195 SECTION 195A section 197 SECTION 2(37A) section 201(1A) section 203(3) section 206(C)(5) section 205 SECTION 24(b) section 269SS 269T section 271(1)(c) section 282B Section 36(1)(vii) section 40(a)(ia) SECTION 40A(3) section 43(5) SECTION 44AB 2007-08 LAST DATE section 44AB limit SECTION 44AE SECTION 44AF Section 50 Section 50C section 54 section 54f SECTION 60 section 616(c) SECTION 64 section 66B service tax section 68 Section 73 section 80 M section 80c section 80CCF section 80D section 80E secured code master card Securities and Exchange Board of India security features sehaj self assessment tax Seminar on service tax changes Senior citizen Senior Citizens Savings Scheme 2004 service ta SERVICE TAX service tax code Service Tax (Removal of Difficulty) Order SERVICE TAX 2010 service tax ac class service tax accounting code service tax adjustment service tax audit SERVICE TAX CHANGES FROM 01.07.2012 service tax changes in budget Service TAX CLARIFICATION SERVICE TAX COMPLIANCE SERVICE TAX DEPOSIT DUE DATE SERVICE TAX DUE DATE Service Tax excel pdf word SERVICE TAX EXEMPTION LIMIT Service Tax Form excel pdf word SERVICE TAX FORMS service tax internet banking service tax notifications SERVICE TAX ON LAW FIRM ADVOCATES service tax on transportation of passengers by air service tax on advocates SERVICE TAX ON BROKERAGE service tax on ca service tax on coaching service tax on construction services service tax on director services SERVICE TAX ON DISTRIBUTION OF ELECTRICITY SERVICE TAX ON EDUCATIONAL SERVICES service tax on gta service tax on health services service tax on hotel clarification SERVICE TAX ON HOTEL ROOM RENT service tax on invoice basis service tax on lawyers SERVICE TAX ON LEASING SERVICE TAX ON PACKAGE SOFTWARE service tax on railway freight SERVICE TAX ON RENT service tax on road service tax on transmission distribution of electricity service tax on work contract tax service tax on wrong head service tax onr eimbursements SERVICE TAX PAYMENT SERVICE TAX PROCEDURES SERVICE TAX RATE CHART service tax rate effective date service tax rate reduced service tax rates increased SERVICE TAX REGISTRATION SERVICE TAX REGISTRATION LIMIT SERVICE TAX RETURN SERVICE TAX RULES service tax section 65(105)m SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME SERVICES CHARGES OF BANKS SERVICES TAXABLE servicetax set off in same head or other head. sevice tax on associate enterprises sez share share market SHARE SHORT TERM Capital GAIN share transfer share your thoughts SHOME COMMITTEE REPORT Short term capital gain depreciable Assets SHORT TDS SHORT TERM ACCOMMODATION short term capital gain 15 % SIM CARD SIMPLE TAX CALCULATOR single premium policy sip SIXTH COMMISSION sixth pay commission skimming slider based EMI calculator SLR small saving schemes small service provider smart buying tips software import son eduction loan father speak asia speak asia fraud speak asia online speed clearing spending habits SPF splitting of wages Spreadsheet SRVICE TAX CLARIFICATION ss patta ST-1 EXCEL ST-2 ST-3 stamp duty standing committee status of return STATUS OF TAX DEDUCTED statutory audit stay on demand notices STCG 10% 15% STGC Stock STOCK EXCHANGE STOCK MARKET FROM 9.00 AM. STOCK MARKETS stp STRUCTURE AND VALIDATION OF PERMANENT ACCOUNT NUMBER stt stt challan sub contractor SUBPRIME CRISES success secrets sugam Sukanya Samriddhi Account SUPREME COURT RENT sur name in pan surcharge cess on tds Surrender-Cancellation of Service Tax Registration survey income tax swiss bank Systematic Investment Plan tally 7.2 tally 9 tally easy tally erp9 tally recycle bin tally shortcut tally simple tally tips TAN TAN STRUCTURE Tariff Value Tax saving tax accounting standards TAX AMNESTY SCHEME tax benefit from budget TAX CALCULATION TAX CALCULATION 2008-09 TAX CALCULATION FORMULA ADDIN EXCEL TAX CALCULATOR tax calculator 10-11 TAX CALCULATOR 2008-09 tax calculator 2010-11 tax calculator after budget 2011 tax calculator financial year 10-11 tax calculator fy 11-12