Interest on borrowing not allowable u/s. 36(1)(iii) if not used for business purpose

JCIT (Asst.) Vs. M/s. Bharath Beedi Works Ltd. (ITAT Bangalore) Objection of the AO is that  borrowing from Directors and shareholders is not for business purpose. The AO has noted that even as per the assessee’s contention, if the assessee had an intention of starting a branch in Orissa, the same appears to have remained on paper because it has not fructified till the date of passing the assessment order. Before us also, it is not shown that it has come into existence. The AO has also noted that additional outlay which was claimed to have been necessary for opening a branch in Orissa which...