https://www.taxtmi.com/caselaws?id=3460 Interest on borrowed funds is deductible under Section 36(1)(iii) only to the extent the borrowings are used for business purposes, and the assessee must show such business use. Where borrowed monies are diverted interest-free to sister concerns for non-business purposes, the related interest is not deductible, and the source of the diverted amount is not decisive. The text also notes that an estimated disallowance of telephone expenses at partners' residences may be sustained where the same proportionate approach has been consistently applied and no sound basis is shown for a different estimate. en-us Mon, 16 Oct 2006 00:00:00 +0530 Mon, 28 Jul 2008 17:08:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=3460 Interest on borrowed funds is deductible under Section 36(1)(iii) only to the extent the borrowings are used for business purposes, and the assessee must show such business use. Where borrowed monies are diverted interest-free to sister concerns for non-business purposes, the related interest is not deductible, and the source of the diverted amount is not decisive. The text also notes that an estimated disallowance of telephone expenses at partners' residences may be sustained where the same proportionate approach has been consistently applied and no sound basis is shown for a different estimate. Case-Laws Income Tax Mon, 16 Oct 2006 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=3460