Once the three conditions pointed out by the Supreme Court in the judgment of Madhav Prasad Jatia v. CIT  118 ITR 200 are satisfied, the assessee would be entitled to deductions in respect of the interest and charges paid on the loans; the matter would be different only in a case where after borrowing the funds from the bank, the assessee utilizes those very funds by giving interest free loans to others.
CASE LAWS DETAILS
DECIDED BY: HIGH COURT OF DELHI,
IN THE CASE OF: CIT Vs. Gautam Motors, APPEAL NO: ITA No. 496 of 2006, DECIDED ON July 19, 2010