https://www.taxtmi.com/caselaws?id=233608 Interest on borrowed capital is ordinarily deductible under section 36(1)(iii) where the borrowing is for a business investment, but section 14A bars deduction if the funds are used to earn exempt income. On the facts, the assessee had substantial own capital and the small loan reflected in the balance sheet did not show that the partnership investment was financed from borrowed funds. The record did not support the presumption of diversion for non-business purposes, so the disallowance of interest was unsustainable and the deletion by the first appellate authority was upheld. en-us Wed, 13 Feb 2013 00:00:00 +0530 Wed, 08 May 2013 06:24:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=233608 Interest on borrowed capital is ordinarily deductible under section 36(1)(iii) where the borrowing is for a business investment, but section 14A bars deduction if the funds are used to earn exempt income. On the facts, the assessee had substantial own capital and the small loan reflected in the balance sheet did not show that the partnership investment was financed from borrowed funds. The record did not support the presumption of diversion for non-business purposes, so the disallowance of interest was unsustainable and the deletion by the first appellate authority was upheld. Case-Laws Income Tax Wed, 13 Feb 2013 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=233608