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2013 (12) TMI 538 - ITAT MUMBAIDisallowance of interest expenses – assessee has swapped earlier loan by new loan - purchase of Tenancy Development Rights(TDR) - The assessee has paid interest on unsecured loan from ACT Fininvest Pvt. Ltd., and Peninsula Land Ltd. on the loans borrowed in the earlier years - Held that:- During the year under consideration to repay the balance loan of ACT Fininvest Pvt. Ltd., the assessee has borrowed from Peninsula Land Ltd - If the earlier loan was accepted as taken for the purposes of business, the new loan should also be accepted as taken for the purposes of business - Akin to the transaction the CBDT vide Circular No. 28 dt. 20.8.1969 has declared that if the second borrowing has really been used merely to repay the original loan and this fact is proved to the satisfaction of the ITO, the interest paid on the second loan would also be allowed as a deduction u/s. 24(1)(vi) – Decided in favour of assessee.
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