Interest paid on borrowed funds used for business cannot be disallowed

ACIT Vs Chinsha Property Pvt Ltd. (ITAT Mumbai) Since the company was engaged in the business of real estate, property in Tulsiwadi was acquired for redevelopment. Hence, commercial expediency/business purpose assessee had invested ₹.11.25 Crores in the project. Therefore, interest cannot be disallowed. Ld. DR submitted that Assessing Officer disallowed the interest observing that assessee had diverted its interest bearing loans to M/s. Joyous Housing Ltd., for non-business purpose and without any commercial expediency and therefore the same was disallowed u/s.36(1)(iii) of the Act. Ld. DR s...