Diversion of interest-bearing funds for commercial transactions not disallowable if loans used for business purposes

Rajmal Lakhichand Vs DCIT (ITAT Pune)

In the case aforementioned ITAT Pune, allowed appeal filed by assessee after observing that provision of section 36 (1) (iii) were not applicable in the present case. Assessee is engaged in the business of manufacturing and trading of gold and silver ornaments, bullions and diamonds. It also engaged in manufacturing of electricity through wind mills. It filed return at Rs.2,13,60,610/-. Subsequently, the assessee filed a revised return declaring total income of Rs.2,43,54,370/-. The return was selected for complete scrutiny and statutory notice

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