Payment can be considered as interest only when it is in respect of pre-existing debt obligation

 Brief of the case:

The Hon’ble Kerala HC in the case of Beacon Projects Private Limited held that a sum paid can be termed as interest only when the same is paid in respect of a pre-existing debt obligation and there existed a debtor-creditor relationship.

Facts of the case:

• The assessee company is a builder which had entered into construction agreements with various customers. The agreement pro

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