Internal CUP Method Applies for Interest-Free Loans Made by Indian Company to Foreign Subsidiaries

The Mumbai Tribunal disallowed the claim of the taxpayer in providing interest free loans to its overseas subsidiary. The Tribunal rejected the argument of the tax payer that the loan was extended on account of commercial expediency and out of its own fund (i.e. interest free).

 Facts of the case

VVF Limited was a company incorporated in India and owned equally by Mr. Rustom Joshi, Mr Faraz Joshi and M/s Interred Products Lim

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