https://www.taxtmi.com/caselaws?id=466101 Allowability of interest under section 36(1)(iii) requires the assessee to prove that borrowed capital was raised wholly and exclusively for business, demonstrating a direct and proximate nexus between the borrowing and business activities; where borrowings refinance earlier liabilities the assessee must establish end-use, commercial rationale, absence of diversion to non-business investments, and support by contemporaneous records, failing which deduction cannot be allowed. The assessing officer is directed to verify purpose, utilisation, nexus and commercial expediency and pass a speaking order after hearing. Disallowance under section 14A read with rule 8D is limited to exempt income and no further disallowance is warranted where a suo motu adjustment has been made. en-us Tue, 21 Jan 2025 00:00:00 +0530 Fri, 23 Jan 2026 19:18:28 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=466101 Allowability of interest under section 36(1)(iii) requires the assessee to prove that borrowed capital was raised wholly and exclusively for business, demonstrating a direct and proximate nexus between the borrowing and business activities; where borrowings refinance earlier liabilities the assessee must establish end-use, commercial rationale, absence of diversion to non-business investments, and support by contemporaneous records, failing which deduction cannot be allowed. The assessing officer is directed to verify purpose, utilisation, nexus and commercial expediency and pass a speaking order after hearing. Disallowance under section 14A read with rule 8D is limited to exempt income and no further disallowance is warranted where a suo motu adjustment has been made. Case-Laws Income Tax Tue, 21 Jan 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=466101