[aaykarbhavan] Parent Co. can claim deductions for guarantee sum paid by it to honour borrowings of its subsidiary co.

[2014] 47 taxmann.com 55 (Madras)/[2013] 359 ITR 612 (Madras)

IT: Where subsequent to invocation of guarantee clause, assessee made payment of guarantee on behalf of its subsidiary company, since amount in question was paid for business expediency of wholly owned subsidiary company, it was to be regarded as directly relatable to business of assessee and, thus, eligible for deduction as business expenditure

IT: Where, for assessment year 2000-01, assessee, who was successfully running business of retail supermarket stores, sold their running business to a new company and in terms of restrictive covenant did not carry on competing business in retail, amount received as non-compete fee was to be treated as capital receipt not liable to tax

 

Regards

Prarthana Jalan

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Posted by: Prarthana Jalan <prarthanajalan@ymail.com>

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