No disallowance can be made for the interest paid on a loan claimed as expenditure when the assessee had discharged its burden of proof regarding the loan received by proving the identity of the creditor, its creditworthiness and the genuineness of the transaction by submitting the affidavit of the director of the creditor, a registered company, and the repayment of the loan through the account payee cheque as held by KolHC in CIT v Shashi Kalalshah — In favour of: The assessee.
Decided on: 29 September 2011.
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