Payment of broken period interest will be allowed as a business expense

Brief of the case:

Payment of broken period interest will be allowed as a business expense;

1.ITAT Mumbai  held in the case of Asst. DIT Vs M/s Hongkong and Shanghani Banking Corporation Ltd that the broken period interest paid would be allowed to the assessee after relying the case of the assessee itself in The Hongkong and Shanghai Banking Corporation Ltd V/s DCIT in ITA Nos.9587/Mum/92 and 9588/Mum/92 (AYs-1989-90 and 1990-91) order dated 22.2.2006 para 3 of the order;

Salaries paid to expatriate employees will be allowed as deduction;

2. ITAT held in the above citations after relying in the case of Emirtes Commercial bank Ltd (now known as Abu Dhabi Commercial Bank Ltd (262 ITR 55); and may other that salaries paid to the expatriate would be allowed as an expense to the assessee because as the services were rendered in India so the same would be taxable in India.

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