CIT v M/s Mahanagar Gas Limited [Income Tax Appeal No. 1978 of 2011] Dated : June 10, 2013 – Bombay High Court Background: Assessee filed its return of income for assessment year 2004-05 declaring a total income of Rs.100.76 crores. The Assessing officer noticed that the assessee had borrowed a sum of Rs.30 crores during the year and had paid total interest of Rs.613.26 lacs on the same. During the year, the assessee had invested an amount of Rs.4147 lacs in mutual funds. The Assessing Officer held that the borrowed funds were utilised for the purpose of investment in mutual funds and disallowed expenditure on account of interest under Section 36(1) (iii) on the ground that the above interest was not attributable to business carried on by the assessee.