Phaltan Sugar Works Ltd. v. Commissioner of Wealth-Tax

208 ITR 989High Court1994#2123 most cited

What is Phaltan Sugar Works Ltd. v. Commissioner of Wealth-Tax authority for?

Interest paid on borrowed capital is deductible under Section 36(1)(iii) only when the capital is used for the assessee's own business, not if advanced to a subsidiary company. This restrictive view was later overruled by the Supreme Court.

54

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2006 to 2025.

Also referred to as

Phaltan Sugar Works Ltd. v. Commissioner of Wealth-Tax · 208 ITR 989 · Section 36(1)(iii) · interest on borrowed capital · advances to subsidiary · commercial expediency · business expediency · deductibility of interest · limited interpretation · overruled decision

Sections most often in play

Section 36(1)(iii)Section 143(3)Section 14ASection 1961Section 10(34)Section 250Section 68Section 142(1)

Issues it is cited on

section 40(a)(2)(b)section 36(1)(ii)interest free advancessection 36(1)(iii)commercial expediencycolourable devicesection 57(iii)put to usesection 36(1)business expediencysection 36section 10(34)

Judgments citing Phaltan Sugar Works Ltd. v. Commissioner of Wealth-Tax

Mukta Arts Ltd, Mumbai vs. Addl CIT 11(1), Mumbai

In the result, appeal of the assessee in ITA no

ITA 1658/MUM/2013[2009-10]Status: DisposedITAT Mumbai23 Apr 2018AY 2009-10

Bench: Shri Joginder Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.1658/Mum/2013 & 1629/Mum/2015 (नििाारण वर्ा / Assessment Year: 2009-10 & 2010-11) बिाम/ Mukta Arts Limited Addl. Cit 11(1) 3Rd Floor, Mukta House Aayakar Bhavan, Filmcity Complex, M K Road V. Goregaon(East) Mumbai-400020 Mumbai-400065 स्थायी ऱेखा सं./ Pan : Aaacm9513F (अपीऱाथी /Appellant) (प्रत्यथी / Respondent) ..

For Appellant: Dr. K. Shivaram &For Respondent: Shri. T A Khan
Section 143(3)Section 14A

…erest being 1.5% to the tune of Rs. 4,14,548/- was brought to tax by the AO by relying on decisions of Hon’ble Madras High Court in the case of K. Somusundaram & Bros. v. CIT 238 ITR 939 and Hon’ble Bombay High Court in the case of Phelta Sugar Works Limited (208 ITR 989) vide assessment order dated 28.12.2011 passed by the AO u/s 143(3), which was later confirmed by learned CIT(A) while disposing of first appeal vide appellate order dated 11.01.2013 passed by learned CIT(A). 5.Now, the assessee has filed an second appeal with tribunal. The learned counsel for the assessee submitted at the outset that authorities…

ACIT, Faridabad vs. M/S Nuchem Ltd, Faridabad

In the result, appeal of the Revenue is dismissed

ITA 2783/DEL/2010[1994-95]Status: DisposedITAT Delhi07 Nov 2017AY 1994-95

Bench: Shri. Amit Shukla & Shri Prashant Maharishi

For Appellant: Shri Atiq Ahmad, D.RFor Respondent: None
Section 271(1)(c)

…ting- off Rs.27,88,311/- on account of two reasons:- (i) According to the learned Assessing Authority no resolution has been passed for writing off this amount and (ii) the amount could not be allowed in view of case of Phaltan Sugar Works Ltd. v/s CWT (1994) 208 ITR 989 (Bom.). It may be pointed out that the assessee has nowhere said that no resolution was passed for writing off this amount. 8 I.T.A. No.2783/DEL/2010 The fact is that the matter has been considered by the Board of Directors of the assessee company on the basis of note of Sh. Arun Barar, Jt. Managing Director, who reported that the BIFR in its O…

Kuloday Technopack P. Ltd, Mumbai vs. ITO 8(2)(2), Mumbai

In the result, appeal of the assessee in ITA No

ITA 3300/MUM/2013[2009-10]Status: DisposedITAT Mumbai29 Sept 2017AY 2009-10

Bench: Shri Joginder Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No. 3300/Mum/2013 (नििाारण वर्ा / Assessment Year : 2009-10 ) आयकर अपीऱ सं./I.T.A. No. 2423/Mum/2014 (नििाारण वर्ा / Assessment Year : 2010-11)

For Appellant: Shri. M. SubramanianFor Respondent: Shri Rajesh Kumar Yadav,DR
Section 143(3)Section 154Section 172Section 172(1)Section 194CSection 195Section 40

…H.R. Sugar Factory (1991) 190 ITR 349 (All), S.A. Builders Ltd. vs. CIT & Anr. (2004) 269 ITR 535 (P&H), CIT vs. Saraya Sugar Mills (P) Ltd. (1993) 110 CTR (All) 23: (1993) 201 ITR 181 (All), Phaltan Sugar Works Ltd. vs. CIT (1995) 127 CTR (Bom) 359 : (1994) 208 ITR 989 (Bom), Phaltan Sugar Works Ltd. vs. CIT (1994) 122 CTR (Bom) 344: (1995) 215 ITR 582 (Bom), Elmer Havell Electrics & Ors. vs. CIT & Anr. (2005) 197 CTR (Del) 316 : (2005) 277 ITR 549 (Del) and C1T vs. Sujanni Textiles (P) Ltd. (1998) 147 CTR (Mad) 417: (1997) 225 ITR 560 (Mad) relied on; Veecumsees vs. CIT (1996) 133 CTR (SC) 500 : (1996) 9 SCC 2…

Shapoorji Pallanji and Company P.Ltd, Mumbai vs. Addl CIT RG 3(3), Mumbai

The appeal of the assessee is partly allowed

ITA 3053/MUM/2015[2011-12]Status: DisposedITAT Mumbai03 Mar 2017AY 2011-12

Bench: Shri Joginder Singh & Shri Manoj Kumar Aggarwalassessment Year: 2011-12 M/S Shapoorji Pallonji & Co. Dcit, Ltd. Circle-3(3), बनाम/ Shapporji Pallonji Centre, Room No.609, 6Th Floor, Vs. 41/44 Minoo Desai Marg, Aayakar Bhavan, M.K.Road, Colaba Mumbai-400020 Mumbai-400005 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aaacs6994C

Section 143(3)Section 14A

…2002, out its own funds and internal accruals except to the extent of relying upon the decision of Hon'ble Kerala High Court in the case of V.I. Baby &: Company, 254 ITR 248 and decision of the Hon'ble Bombay High Court in the case of Phalton Sugar Works Lid, 208 ITR 989 disallowed the said interest of Rs. 11,19,382/-. Being aggrieved the assessee filed appeal before the first appellate authority. 5.2 It was contended on behalf of the assessee that assessee's own funds were far in excess of the interest free loans given to its subsidiaries: It was 40 M/s Shapoorji Pallonji & Company Pvt. Ltd. contended that as p…

M/S Moira Steel Ltd., Indore vs. The DCIT 1(1), Indore

In the result, the appeal of the assessee is dismissed

ITA 593/IND/2013[2005-06]Status: DisposedITAT Indore02 Mar 2017AY 2005-06

Bench: Shri C. M. Garg & Shri O.P. Meenaआ.अ.सं /.I.T.A. No. 593/Ind/2013 "नधा"रण वष" / Assessment Year: 2005-06 M/S. Moira Steel Limited, Vs. Dy. Cit, Shanivar Darpan Press 1(1), Complex, Indore. A.B. Road, Indore अपीलाथ" / अपीलाथ" /Appellant अपीलाथ" / अपीलाथ" / ""यथ" / ""यथ" /Respondent ""यथ" / ""यथ" / "था.ले.सं./Pan: Aabcm2051K अपीलाथ" क" ओर से/ अपीलाथ" क" ओर से/Appellant By अपीलाथ" क" ओर से/ अपीलाथ" क" ओर से/ Shri C.P.Rawka, C.A. ""यथ" क" ओर से/ ""यथ" क" ओर से/Respondent By ""यथ" क" ओर से/ ""यथ" क" ओर से/ Shri Mohd. Javed, Dr सुनवाई क" तारीख/Date Of Hearing सुनवाई क" तारीख/ सुनवाई क" तारीख/ सुनवाई क" तारीख/ 02.03.2017 उ"ोषणा क" तारीख/ उ"ोषणा क" तारीख/Date Of उ"ोषणा क" तारीख/ उ"ोषणा क" तारीख/ 03.03.2017 Pronouncement आदेश / आदेश /O R D E R आदेश / आदेश /

Section 143(3)

…991) 187 ITR 363 (All) and also placed reliance on the decisions in the case of CIT vs. Motor General Finance Limited, 254 ITR 449 (Del), Indian Metals & Ferro Alloys Limited vs. CIT, (1992) 193 ITR 344 (Orissa) and Phalthan Sugar Works Ltd. vs. CWT, (1994)208 ITR 989 (Bom). 1.2 Being aggrieved with the order, the assessee carried the matter before the ld. CIT(A). In the appeal, the ld. CIT(A) noted that initially the assessee replied that the loans and advances are related to business, but when the AO asked to specify the nature of business with these six parties, the assessee could not establish any busi…

M/S Divakar Solar System Ltd., Kolkata vs. DCIT, Cir-10, Kolkata

In the result, the appeal of the assessee is allowed

ITA 1301/KOL/2015[2012-2013]Status: DisposedITAT Kolkata16 Dec 2016AY 2012-2013

Bench: Shri M. Balaganesh, Am & Shri S. S. Viswanethra Ravi, Jm]

For Appellant: Shri S. K. Tulsiyan, AdvocateFor Respondent: Shri Sallong Yaden, Addl. CIT
Section 143(3)Section 40A(2)

…ot really relevant. What is relevant is whether the assessee advanced such amount to its sister concern as a measure of commercial expediency. 32. Learned counsel for the Revenue relied on a Bombay High Court decision in Phaltan Sugar Works Ltd. v. CWT [1994] 208 ITR 989 1 in which it was held that deduction under section 36(1)(iii) can only be allowed on the interest if the assessee borrows capital for its own business. Hence, it was held that interest on the borrowed amount could not be allowed if such amount had been advanced to a subsidiary company of the assessee. With respect, we are of the opinion that the…

Vipula J Choksi, Mumbai vs. ITO 8(3)(4), Mumbai

In the result, the appeal filed by the Assessee is partly allowed

ITA 6064/MUM/2014[2011-12]Status: DisposedITAT Mumbai25 May 2016AY 2011-12

Bench: Shri Jason P. Boaz, Am & Shri Sandeep Gosain, Jm Vipula J. Choksi Vs. Income Tax Officer-8(3)-4 Siddhi Priya Building Aaykar Bhavan, N.S. Road 4, Jvpd Scheme Mumbai-400 020. Vile Parle (W) Mumbai-400 056. Pan: Acxpc2426M Appellant .. Respondent

Section 143(1)Section 143(2)Section 143(3)Section 14ASection 36(1)(iii)Section 57

…IN THE INCOME TAX APPELLATE TRIBUNAL “F”, BENCH MUMBAI BEFORE SHRI JASON P. BOAZ, AM AND SHRI SANDEEP GOSAIN, JM Vipula J. Choksi Vs. Income Tax Officer-8(3)-4 Siddhi Priya Building Aaykar Bhavan, N.S. Road 4, JVPD Scheme Mumbai-400 020. Vile Parle (W) Mumbai-400 056. PAN: ACXPC2426M Appellant .. Respondent Appellant by S/Shri Ajay R Singh Respondent by S/Shri A. Kumbhar Date of hearing: 03-05-2016 Date of pronouncement:25-05-2016 O R D E R PER SANDEEP GOSAIN,JUDICIAL MEMBER: The present appeal has been filed by the assessee against the order of the learned CIT (A)-18, Mumbai dated 11-07-2014 passed in appe…

E-City Investments & Holdings Co. Pvt. Ltd., Mumbai vs. D.C.I.T. RG. 8(1) (OSD), Mumbai

The appeal of the assessee is allowed

ITA 8382/MUM/2011[2008-09]Status: DisposedITAT Mumbai03 Feb 2016AY 2008-09

Bench: Shri Joginder Singh & Shri Ashwani Tanejaassessment Year: 2008-09 E-City Investments & Holdings Dcit, Company Private Limited, Range-8(1)(Osd), बनाम/ 844/4, Shah Industrial Estate, Aayakar Bhavan, Vs. Off. New Link Road, Opp. M.K. Road, Laxmi Industrial Estate, Mumbai-400020 Andheri (West), Mumbai-400053 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No.Aaace8030F "नधा"रती क" ओर से / Assessee By Shri Vijay Mehta राज"व क" ओर से / Revenue By Mr.J. Saravanan -Dr

Section 143(3)Section 36(1)(iii)

…t really relevant. What is relevant is whether the assessee advanced such amount to its sister concern as a measure of commercial expediency. 33. Learned counsel for the Revenue relied on a Bombay High Court deci sion in Phaltan Sugar Works Ltd. v. CWT [1994] 208 ITR 989 in which it was held that deduction under section 36(1)(iii) can only be allowed on the interest if the assessee borrows capital for its own business. Hence, it was held that interest on the borrowed amount could not be allowed if such amount had been advanced to a subsidiary company of the assessee. With respect, we are of the opinion that the v…

ACIT CC-8, Mumbai vs. Jindal Drugs Ltd, Mumbai

In the result, appeals filed by the assessee are allowed in part whereas the appeals filed by the Revenue are dismissed

ITA 376/MUM/2010[2007-08]Status: DisposedITAT Mumbai20 Nov 2015AY 2007-08

Bench: Shri R.C. Sharma & Shri Sandeep Gosainassessment Year: - 2005-06 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel 229, Nariman Point, – 8 Aaykar Bhavan, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Appellant Respondent Pan/Gir No. Aaacj1000A Assessment Year: - 2005-06 The Asst. Commissioner Of Vs.` Jindal Drugs Limited Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel – 8 229, Nariman Point, Old Cgo Bldg, Annexe, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Pan/Gir No. Aaacj1000A Appellant Respondent Assessment Year: - 2006-07 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, Income Tax, Central Circel – 8, B&C, Aaykar Bhavan, 229, Nariman Point, M.K. Road, Mumbai – 400 020. Mumbai – 400 021. Pan/Gir No. Aaacj1000A Appellant Respondent

Section 143(3)Section 14ASection 36(1)(iii)Section 80Section 80I

…nd the purpose for giving advance free loans were explained before the CIT (A)and also before the AO. The AO merely disallowed the claim of the assessee following the decision of the jurisdictional High Court in the case of Phalton Sugar Works Ltd reported in 208 ITR 989 wherein it has been held that any funds given to the sister concern on interest free, the interest can be disallowed u/s 36(1)(iii). The decision of the Hon’ble Bombay High Court in the case of Phalton Sugar Works Ltd has been reversed by the Hon’ble Supreme Court in the case of SA Builders in 288 ITR 1 =(2006-TIOL-179-SCIT). The Hon’ble Supreme…

ACIT CC.8, Mumbai vs. Jindal Drugs Ltd, Mumbai

In the result, appeals filed by the assessee are allowed in part whereas the appeals filed by the Revenue are dismissed

ITA 3885/MUM/2009[2006-07]Status: DisposedITAT Mumbai20 Nov 2015AY 2006-07

Bench: Shri R.C. Sharma & Shri Sandeep Gosainassessment Year: - 2005-06 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel 229, Nariman Point, – 8 Aaykar Bhavan, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Appellant Respondent Pan/Gir No. Aaacj1000A Assessment Year: - 2005-06 The Asst. Commissioner Of Vs.` Jindal Drugs Limited Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel – 8 229, Nariman Point, Old Cgo Bldg, Annexe, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Pan/Gir No. Aaacj1000A Appellant Respondent Assessment Year: - 2006-07 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, Income Tax, Central Circel – 8, B&C, Aaykar Bhavan, 229, Nariman Point, M.K. Road, Mumbai – 400 020. Mumbai – 400 021. Pan/Gir No. Aaacj1000A Appellant Respondent

Section 143(3)Section 14ASection 36(1)(iii)Section 80Section 80I

…nd the purpose for giving advance free loans were explained before the CIT (A)and also before the AO. The AO merely disallowed the claim of the assessee following the decision of the jurisdictional High Court in the case of Phalton Sugar Works Ltd reported in 208 ITR 989 wherein it has been held that any funds given to the sister concern on interest free, the interest can be disallowed u/s 36(1)(iii). The decision of the Hon’ble Bombay High Court in the case of Phalton Sugar Works Ltd has been reversed by the Hon’ble Supreme Court in the case of SA Builders in 288 ITR 1 =(2006-TIOL-179-SCIT). The Hon’ble Supreme…

Jindal Drugs Ltd, Mumbai vs. ACIT Cen Cir 8, Mumbai

In the result, appeals filed by the assessee are allowed in part whereas the appeals filed by the Revenue are dismissed

ITA 3818/MUM/2009[2006-07]Status: DisposedITAT Mumbai29 Oct 2015AY 2006-07

Bench: Shri R.C. Sharma & Shri Sandeep Gosainassessment Year: - 2005-06 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel 229, Nariman Point, – 8 Aaykar Bhavan, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Appellant Respondent Pan/Gir No. Aaacj1000A Assessment Year: - 2005-06 The Asst. Commissioner Of Vs.` Jindal Drugs Limited Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel – 8 229, Nariman Point, Old Cgo Bldg, Annexe, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Pan/Gir No. Aaacj1000A Appellant Respondent Assessment Year: - 2006-07 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, Income Tax, Central Circel – 8, B&C, Aaykar Bhavan, 229, Nariman Point, M.K. Road, Mumbai – 400 020. Mumbai – 400 021. Pan/Gir No. Aaacj1000A Appellant Respondent

Section 143(3)Section 14ASection 36(1)(iii)Section 80Section 80I

…nd the purpose for giving advance free loans were explained before the CIT (A)and also before the AO. The AO merely disallowed the claim of the assessee following the decision of the jurisdictional High Court in the case of Phalton Sugar Works Ltd reported in 208 ITR 989 wherein it has been held that any funds given to the sister concern on interest free, the interest can be disallowed u/s 36(1)(iii). The decision of the Hon’ble Bombay High Court in the case of Phalton Sugar Works Ltd has been reversed by the Hon’ble Supreme Court in the case of SA Builders in 288 ITR 1 =(2006-TIOL-179-SCIT). The Hon’ble Supreme…

ACIT Cen Cir-8, Mumbai vs. M/S. Jindal Drugs Ltd, Mumbai

In the result, appeals filed by the assessee are allowed in part whereas the appeals filed by the Revenue are dismissed

ITA 4342/MUM/2008[2005-2006]Status: DisposedITAT Mumbai29 Oct 2015AY 2005-2006

Bench: Shri R.C. Sharma & Shri Sandeep Gosainassessment Year: - 2005-06 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel 229, Nariman Point, – 8 Aaykar Bhavan, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Appellant Respondent Pan/Gir No. Aaacj1000A Assessment Year: - 2005-06 The Asst. Commissioner Of Vs.` Jindal Drugs Limited Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel – 8 229, Nariman Point, Old Cgo Bldg, Annexe, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Pan/Gir No. Aaacj1000A Appellant Respondent Assessment Year: - 2006-07 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, Income Tax, Central Circel – 8, B&C, Aaykar Bhavan, 229, Nariman Point, M.K. Road, Mumbai – 400 020. Mumbai – 400 021. Pan/Gir No. Aaacj1000A Appellant Respondent

Section 143(3)Section 14ASection 36(1)(iii)Section 80Section 80I

…nd the purpose for giving advance free loans were explained before the CIT (A)and also before the AO. The AO merely disallowed the claim of the assessee following the decision of the jurisdictional High Court in the case of Phalton Sugar Works Ltd reported in 208 ITR 989 wherein it has been held that any funds given to the sister concern on interest free, the interest can be disallowed u/s 36(1)(iii). The decision of the Hon’ble Bombay High Court in the case of Phalton Sugar Works Ltd has been reversed by the Hon’ble Supreme Court in the case of SA Builders in 288 ITR 1 =(2006-TIOL-179-SCIT). The Hon’ble Supreme…

Jindal Drugs Ltd, Mumbai vs. M/S. ACIT Cen Cir-8, Mumbai

In the result, appeals filed by the assessee are allowed in part whereas the appeals filed by the Revenue are dismissed

ITA 2592/MUM/2008[2005-2006]Status: DisposedITAT Mumbai29 Oct 2015AY 2005-2006

Bench: Shri R.C. Sharma & Shri Sandeep Gosainassessment Year: - 2005-06 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel 229, Nariman Point, – 8 Aaykar Bhavan, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Appellant Respondent Pan/Gir No. Aaacj1000A Assessment Year: - 2005-06 The Asst. Commissioner Of Vs.` Jindal Drugs Limited Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel – 8 229, Nariman Point, Old Cgo Bldg, Annexe, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Pan/Gir No. Aaacj1000A Appellant Respondent Assessment Year: - 2006-07 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, Income Tax, Central Circel – 8, B&C, Aaykar Bhavan, 229, Nariman Point, M.K. Road, Mumbai – 400 020. Mumbai – 400 021. Pan/Gir No. Aaacj1000A Appellant Respondent

Section 143(3)Section 14ASection 36(1)(iii)Section 80Section 80I

…nd the purpose for giving advance free loans were explained before the CIT (A)and also before the AO. The AO merely disallowed the claim of the assessee following the decision of the jurisdictional High Court in the case of Phalton Sugar Works Ltd reported in 208 ITR 989 wherein it has been held that any funds given to the sister concern on interest free, the interest can be disallowed u/s 36(1)(iii). The decision of the Hon’ble Bombay High Court in the case of Phalton Sugar Works Ltd has been reversed by the Hon’ble Supreme Court in the case of SA Builders in 288 ITR 1 =(2006-TIOL-179-SCIT). The Hon’ble Supreme…

S.A. Builders Ltd vs. Commnr. of Income Tax, Chandigarh

C.A. No.-005811-005811 - 2006Supreme Court14 Dec 2006
For Respondent: Commissioner of Income Tax (Appeals) Chandigarh & Anr. .. Res
Section 154

…relevant is whether the assessee advanced such amount to its sister concern as a measure of commercial expediency. Learned counsel for the Revenue relied on a Bombay High Court decision in Phaltan Sugar Works Ltd. Vs. Commissioner of Wealth-Tax (1994) 208 ITR 989 in which it was held that deduction under Section 36(1)(iii) can only be allowed on the interest if the assessee borrows capital for its own business. Hence, it was held that interest on the borrowed amount could not be allowed if such amount had been advanced to a subsidiary company of the assessee. With respect, we are of the opinion that…