Once nexus between expenses incurred and purpose of business was established, interest expenditure cannot be disallowed

Facts of the case:

• Assessee was engaged in the business of educational activities and declared an income of Rs.2,11,15,617/-.
• In the course of the assessment proceedings, it was noticed that assessee had given interest free advances and loans to its sister concerns and claim interest expenses accordingly.
• The assessee was required to explain the allowability of interest expenses in view of above.

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