Income Tax Act, 1961 – Section 36(i)(iii) – Advancement of interest free loan – Utilization of borrowed fund – Disallowance of interest expenditure – During assessment proceedings, AO issued show cause notice to assessee as to why disallowance under Section 36(i)(iii) of the Act should not be done in respect of interest deduction claimed on borrowed fund, as it was not utilized for business of assessee but was used for advancing interest free loan to sister concerns – Assessee contended that amount advanced to sister concerns has been exclusively used for business purpose – AO did not accept contention of assessee and made disallowance of interest expenditure in respect of borrowed fund utilized for other than business purpose of assessee – Assessee challenged action of AO before CIT(A), but could not succeed – Whether CIT(A) has erred in confirming disallowance of claim of deduction of interest for advancing interest free loan to sister concerns – HELD – Section 36(1)(iii) of the Act provides for deduction of interest on loans raised for business purposes – If interest free loan given to sister concern has been advanced as a measure of commercial expediency, then interest on borrowed fund used for advancing loan to sister concern is an allowable deduction – Assessee is taking only legal plea that interest free loan was advanced to sister concerns for business purpose and commercial expediency – Assessee has not uttered a single word before AO as well as before CIT(A) to show that there were business transactions between assessee and sister concerns which has necessitated to advance interest free loan to sister concerns – In absence of any reference to any business transaction between assessee and sister concerns, plea of commercial expediency cannot be accepted – Assessee has miserably failed to establish a case of commercial expediency or business exigency in granting interest free loan to sister concerns by utilizing borrowed fund – Impugned order passed by CIT(A) affirmed – Appeal is dismissed