Held that the assessee had demonstrated that the borrowed funds were used for business purposes, and the conditions laid out in section 36(1)(iii) were met. The outstanding amounts with the holding company and other customers were part of normal business transactions, with no interest charged in alignment with industry practices. Given the regular business transactions and fluctuating balances, the question of notional interest did not arise. Order of CIT(A) is affirmed. (AY.2015-16)
ACIT v. Gujarat Insecticides Ltd. (2024)114 ITR 12 (SN)(Ahd)(Trib)
S. 36(1)(iii) :Interest on borrowed capital-Trade receivable-Borrowed fund is used for the purpose of business-Notional interest cannot be charged.
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