ITAT says Interest Disallowance Must Reflect Actual Fund Diversion

The assessee diverted ₹80 lakh out of a ₹2 crore cash-credit facility to a third party and could not establish commercial expediency or a business nexus. ITAT therefore sustained a disallowance, but reduced it from ₹2.87 lakh to ₹1.15 lakh after considering the ₹24 lakh repayment before year-end and the interest actually earned.