Dismissing the appeal the Court held that , that the finding of fact recorded by the AO, the CIT(A) and the Tribunal was that the assessee- firm had supplied its finished products to its sister concern and had not insisted upon the sale proceeds and had availed of a letter of credit against the bills and paid interest. This arrangement could not be considered as business prudence and expediency. The interest on borrowed capital was not deductible.( AY.1997-98)