Tribunal held that Intercorporate deposit to subsidiary is strategic purposes and not for earning dividend hence interest is allowable as deduction . Common interest expenditure to be apportioned on basis of cost of financing and not on basis of turn over. When the assessee is carrying on shipping business , tonnage income not form part of normal business Income . ( AY.2013-14)
Essar Shipping Ltd. v. ACIT (2020) 79 ITR 555 (Mum) (Trib)
S. 36(1)(iii) :Interest on borrowed capital – Intercorporate deposit to subsidiary – Strategic purposes and not for earning dividend – Interest is allowable as deduction – Common interest expenditure to be apportioned on basis of cost of financing and not on basis of turn over- Business income – Shipping business – Tonnage income not form part of normal business Income . [ S.37(1), 115VE ]