Business expenditure

The interest paid to the income tax department under the provisions of the Income Tax Act cannot be deducted under s 36(1)(iii) while computing the business income of the assessee as there was no borrowing by the assessee — as held by PuneTrib in Sandvik Asia Ltd v Dy CIT — In favour of: The revenue.

Interest — Netting of interest — Interest received from and paid to the income tax department cannot be netted against each other.

Decided on: 13 September 2011.