Allowability of Interest on capital borrowed for acquisition of asset

Golf View Homes Limited Vs ACIT (ITAT Bangalore)

From a perusal of the order of AO/CIT(A) it is clear that the disallowance has been made on the basis of the proviso to Sec.36(1)(iii) of the Act. There is no dispute that the interest free loans were given for the purpose of business of the Assessee.

The proviso was inserted by the finance Act, 2003 w.e.f. 1.4.2003. The words “for extension of existing business or profession” were omitted by the Finance Act, 2015 w.e.f 1.4.2016. The Hon’ble Supreme Court in the case of D

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