Business interest deduction and alternate claims can be allowed when borrowing is used for business and record support exists.

Interest on borrowed funds used for the assessee's business was treated as allowable business expenditure because the borrowing and its business use were factually established, and the deduction could not be denied merely because the claim was shown under a different head in the return. The commentary also states that the rule against entertaining a fresh claim without a revised return applies at the Assessing Officer stage and does not restrict appellate powers, so an alternate claim supported by the record may be admitted in appeal even if not originally made in that form.

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Issues: (i) whether interest paid on borrowed funds used for the assessee's business was allowable as a deduction as business expenditure, and (ii) whether an appellate authority could entertain the alternate claim without a revised return.

Issue (i): Whether interest paid on borrowed funds used for the assessee's business was allowable as a deduction as business expenditure.

Analysis: The loan was found to have been taken and utilised for the assessee's business, and no infirmity in the borrowing or its use was established. The disallowance was made only because the claim had initially been reflected under a different head of income. Once the factual nexus between the borrowing and business use stood accepted, the interest could not be denied merely on the basis of nomenclature in the return.

Conclusion: The deduction of interest expenditure was allowable as business expenditure and the addition was rightly deleted.

Issue (ii): Whether an appellate authority could entertain the alternate claim without a revised return.

Analysis: The restriction on entertaining a fresh claim without a revised return operates at the stage of the Assessing Officer and does not curtail the powers of appellate authorities. A claim that is otherwise supported by the record may therefore be admitted in appeal, even if not made in the original return in that form.

Conclusion: The alternate claim was validly entertained in appellate proceedings notwithstanding the absence of a revised return.

Final Conclusion: The Revenue's challenge to the deletion of the interest disallowance failed, and the appellate orders allowing the assessee's claim were sustained.

Ratio Decidendi: A deduction otherwise supported by the facts and records cannot be denied merely because it was claimed under a different head or not through a revised return, and appellate authorities retain power to admit such a claim.

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