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2022 (6) TMI 72 - AT - Income TaxDeduction of interest u/s. 36(1)(iii) - loan amount for making investment in shares - HELD THAT:- As relying on case of M/S. TATA SONS LTD. AND (VICE-VERSA) [2021 (5) TMI 188 - ITAT MUMBAI] interest on borrowed capital utilized for making investments would be eligible for deduction u/s. 36(1)(iii) of the Act because there is no bar for allowability of interest u/s. 36(1)(iii) of the Act for utilizing the borrowed funds for making investments specifically meant for the purposes of business of the Assessee. Coming to the instant case, it is not in dispute here that the Assessee is a NBFC company and engaged into the business of investment in shares, debentures, bonds and financing etc. as ordinary activities. During the year under consideration, the Assessee utilized the loan amount for making investment in shares in ordinary course and eventually earned dividend or capital gains. It is also not the case of the Revenue department that the Assessee had no commercial expediency for making the investments while using the borrowed funds. Having regards to the nature of activities the Assessee is engaged in, there is no justification for disallowance of interest u/s. 36(1)(iii) of the Act. - Appeal of assessee allowed.
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