Interest on borrowings made for acquiring shares in Malaysian company alongwith controlling interest is allowable

Ultramarine & Pigments Ltd. V/s ACIT (ITAT Mumbai)- The undisputed fact is that there are no fresh loans or investments during the year. The Hon’ble Jurisdictional High Court in K. Raheja Corporation Pvt. Ltd. (supra) laid down that when the Revenue cannot point out as to how interest on borrowed funds was attributable to the earning of dividend income which was exempt under section 10(33) of the Act (as it then stood)’ no dis allowance can be made. It laid down that in the absence of any material or basis to hold that the interest expenditure directly or indirectly is attribut...