The AO had made the disallowance u/s 36(1)(iii) of the Act on the premise that the assessee could have repaid the borrowed funds out of sale proceed of the land and could have reduced the interest burden. The ITAT reiterating the favourable CIT(A) order held that the AO cannot step into the shoes of the businessmen and decide as to how the mange the affairs. For making disallowance u/s 36(1)(iii), the AO has to demonstrate that borrowed funds were diverted for non-business purpose and as in the present case the AO has not gathered any evidence to prove the same, therefore the disallowance made by the AO u/s 36(1)(iii) was deleted by the ITAT. ( AY. 2205 -06, 2008-09)