Sushmita Holdings Ltd. vs Joint Cit on 31 July, 2006
In Phalton Sugar Works Ltd. v. CWT and Phalton Sugar Works Ltd. case (supra) 215 ITR 582 (Bom.), the Hon'ble jurisdictional High Court has held that a subsidiary company is a separate legal entity and the business of the subsidiary company cannot be considered as the business of the assessee itself. The Hon'ble High Court has further held that the interest on money borrowed by the assessee for advancing to its subsidiary company would not be deducted from the income of the assessee-company under Section 36(1)(iii) of the Income Tax Act. The Hon'ble High Court has further observed: