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2014 (4) TMI 392 - AT - Income TaxMaintainability of the disallowance of interest – Held that:- The CIT (A), while proceeding correctly, adopted the ‘wrong’ balance-sheet, i.e., as at the close of the year, and also did not draw the correct inference from his working - the entire capital of the firm as well as the borrowed capital is utilized toward business assets – it may not either be liquid or generate income would be by itself not relevant – Relying upon Veecumsees v. CIT [1996 (4) TMI 6 - SUPREME Court] - the assessee’s reliance on the allowance of interest for earlier years is only indicative and not determinative of the matter - The borrowed capital must continue to be utilized for business purposes for the period for which the interest is being claimed as a business expense - the disallowance at Rs.140950/- only, is allowed for allowance for the balance – Decided partly in favour of Assessee.
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