Tribunal held that the entire transaction of taking of loan and payment of interest thereon and giving of loan and earning of interest therefrom was duly established. The only factor that prompted the Assessing Officer for making the disallowance was that there was no prudence in carrying out the activity in such a manner, which culminated in incurring of net interest loss which fact could at the best be a triggering point for further investigation but could not have been the basis or foundation for the disallowance of interest expenditure claimed by the assessee. Since the disallowances were made merely on surmises and conjectures, they were to be deleted.(AY.2007-08)