No disallowance u/s 36(1)(iii) as borrowed fund had direct nexus with utilization towards interest-bearing advances

ACIT Vs Sh. Parminder Singh Kalra (ITAT Delhi) Conclusion:  All the interest bearing funds had been utilized towards interest bearing advances and this was evident from the balance sheet whereby interest bearing loan was Rs. 3,03,50,275 against which, interest bearing advances were Rs. 3,41,00,000 i.e. more than the amount borrowed. No disallowance could be made under section 36(1)(iii) as the amount borrowed on interest had been used specifically and exclusively for advancing amounts of interest for the purposes of earning income. Held: During the year, assessee had borrowed interest bearing...