Interest Paid on loan advanced to related concerns for business purpose allowable

Assessee has submitted in this case that advance  was given amounting to Rs.  39,36,860/- to M/s Kohinoor International  and interest was charged @ 6%. It was further claimed that the said  advances were given out of the partners capital which was Rs.   30,91,322/- as on 31.3.2007. Furthermore, assessee has contended  that there were commercial expediency involved in granting of the  said advance as the assessee was to obtained distributorship from  M/s Kohinoor International. I have carefully considered the  submissions. In my considered opinion, submission of the assessee  has cons...