Interest not allowable for investment without commercial exigencies

The facts, in brief, are that the ld. Assessing Officer disallowed interest payment of Rs.3,61,356/- being capital introduced in M/s King Empire Developers (AOP), on the plea that the interest bearing funds were diverted, without charging any interest, out of own funds. On appeal, before the Ld. Commissioner of Income Tax (Appeal) granted relief to the assessee, which is under challenge before this Tribunal. It is noted that the assessee gave loan and advances to the tune of   Rs.23,68,000/-   and  also  invested Rs. 1,52,00,427/- in Kings Empire Developers and no interest was charged on...