(1) Any payment of interest or, as the case may be, payment of any profit share on any capital borrowed for the purpose of business shall be allowable as business expenditure.

(2) If it is found that any part of the borrowed money has been used for other borrowed purposes money outside has the business been transferred or any part else of the where assets outside acquired the business in (where the investment is not the business of the transferor) the said money or the part of the assets used in the business Interest or profit expense shall be allowed at the rate proportionate to the portion utilized.