AO after exmaning books was of the view that the assessee had diverted interest bearing fund for advancing loans to related entities at much lower rate of interest than the rate of interest at which it had availed the loan. Further, he found that the assessee had diverted interest bearing fund for non-business purpose, such as, advances given for flat at Bandra Kurla Complex, flat at Ashok Garden, to employees of Group Company, subsidiary company and real estate business without charging any interest. Thus, he quantified the interest bearing fund diverted for non-business purpose at Rs. 9,49,69,730. Since, the assessee had availed the loans by paying average rate of interest of 11.73%, applying the said rate to the interest bearing fund diverted for non-business purpose, he worked out the proportionate interest disallowance under section 36(1)(iii) of the Act at Rs. 1,11,39,949. actual matrix of the issue reveals that the loan was sanctioned by HDFC Bank for constructing a 10 story building named Piramal Towers by Piramal Holdings Pvt. Ltd. Subsequently, the building and the loan sanctioned was transferred to the assessee. A part of the building was utilized by the assessee and its group companies for commercial purpose and the rest of the building was leased out by the assessee. It is evident, the area leased out for rental purpose depends on the occupancy of the property for commercial purpose. Therefore, the area let out changes from time to time. It is also evident, from the past years the assessee had been allocating the interest on loan on the basis of area let out and the aforesaid basis of allocation of interest commensurate with the area let out was accepted by the Department from the assessment year 2004-05 onwards, except, the impugned assessment year. As could be seen, the Assessing Officer has disallowed the deduction claimed under section 24(b) of the Act, basically for two reasons viz. (i) the assessee has not proved utilization of fund for construction of property; and (ii) the deduction under section 24(b) of the Act cannot be allowed on the basis of area let out. In our view, the reasons on the basis of which the Assessing Officer disallowed deduction under section 24(b) of the Act, are unacceptable. Undisputedly, the loan was sanctioned for construction of the entire building. When a part of the building is used for commercial purpose and the rest of it is let out, the interest expenditure on the loan availed for construction of building has to be apportioned between the area let out and area used for commercial purpose, as this is the most scientific basis on which the interest can be allocated. It is also very much clear that the Assessing Officer has not pointed out any major deficiency in allocation of interest expenditure between the area used for commercial purpose and area let out. The allegation of the Assessing Officer that the assessee at its own will changes the area let out is on a mere presumption. We do not find any material on record to indicate that the Assessing Officer had carried out any specific enquiry to disprove assessee's claim regarding the area let out. Moreover, when the allocation of interest expenditure in identical manner has been accepted by the Assessing Officer in past assessment years, there is no valid reason for not accepting it in the impugned assessment year when the facts are identical. In any case of the matter, the expenditure incurred by the assessee would be allowable either under section 24(b) or under section 36(1)(iii) of the Act. That being the case, it will make no difference to the Revenue. For the aforesaid reasons, we are inclined to uphold the decision of the learned Commissioner (Appeals) on the issue. Grounds are dismissed. In the result, Revenue's appeal is dismissed.