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13 | P a g e IDBI Bank Ltd.;

AYs: 98-99 to 10-11, (3) The Development Bank shall not grant any loan or advance or other financial accommodation on the security of its own bonds or debentures.

13. Shorn of other details, so far as is relevant for our purpose, a perusal of the aforesaid sub section (1) of section 9 of the IDBI Act, 1964 shows that granting of loans and advances, financing of or refinancing of State Financial Corporations is one of the primary objects of the assessee, as mandated by the Parliament. Therefore, on this very count itself, we are unable to subscribe to the stand of the income- tax authorities that the investments made for financing or refinancing of State Financial Corporations is not an activity undertaken in the course of assessee's business; in our view the interest expenditure relatable to such investments cannot be disallowed in terms of Sec. 36(1)(iii) of the Act having regard to the fact that such activity is in the tune of assessee's business objects.