CIT v. Sri Hariram Hotels Pvt LTD 2010(Karn.)
Company borrowed loan from its director to purchase land & put up a Hotel Project.But project cudn't get materialized & company sold that land.Company passed resolution to pay interest on that loan & claimed interest paid to directors after sale. Here, Passing resolution for pmt of intt is not relevant since intt starts accruing as soon as loan is taken.Hence intt paid is allowed as exp.
Company borrowed loan from its director to purchase land & put up a Hotel Project.But project cudn't get materialized & company sold that land.Company passed resolution to pay interest on that loan & claimed interest paid to directors after sale. Here, Passing resolution for pmt of intt is not relevant since intt starts accruing as soon as loan is taken.Hence intt paid is allowed as exp.
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