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Messages - aksrivastava

The Apex Court on 8th February pronounced its judgement in case of Core Health Care holfing that intererst paid on borrowings for acquisition of assets is allowable deduction. The insertion of Proviso to sec 36 (1)(iii) has also been referred to and held as prospective.

Athough the Proviso to Sec. 36(1)(iii) inserted by F A 2003 has been commented upon that it is prospective, We need to delibrate as to what is the meaning and import of the word "extension of existing business".

Does it mean that the Proviso shall be attracted only if the new asset increases production or it shall also be applicable if new assets in the form of office equipment are purchased with borrowed capital.?

I look forward to views of members.