Dismissing the appeal of the assessee the Court held that ;the assessee did enter a new line of business, unconnected to its existing business, and it had not by then commenced that new business. Accordingly the interest paid on borrowed amount for acquisition of asset which was not put to use during the relevant year , therefore interest is not allowable .( AY.2006 -07)
Muthoot Finance Ltd. v. JCIT (2018) 408 ITR 491 / 169 DTR 272 /( 2019) 306 CTR 396(Ker) (HC)
S.36(1)(iii): Interest on borrowed capital — New line of business-Amount must have been used for acquisition of asset and asset must have been used – Interest is not allowable.