~/
(2008) 2 S.C.R. 650
~
_...,, .
A
ASSISTANT COMMISSIONER OF INCOME TAX,
AHMEDABAD
'II.
A~VIND POLYCOT LTD.
(Civil Appeal No. 1182 of 2008)
B
FEBRUARY 8, 2008
[S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ.]
J..
Income Tax Act, 1961 - s.36(i)(iii) - Interest paid in
c
respect of borrowings on capital assets not put to use in the
concerned financial year - Held : Is allowable deduction.
The question which arose of consideration in the
present appeal is : Whether interest paid in respect of
borrowings on capital assets not put to use in the
D concerned financial year can be permitted as allowable
deduction under Section 36(1) (iii) of the Income-Tax Act,
A
1961?
Dismissing the appeal, the Court
·~
E
·HELD: Interest paid in respect of borrowings on
capital assets not put to use in the concerned financial
year is allowable deduction under s.36(1 )(iii) of the
-:
Income-Tax Act, 1961. [Para 2] [651-8, C]
Dy. Commnr. of Income Tax, Ahmedabad v. Mis. Core
F
Health Care Ltd. 2008(2) Scale 327 - relied on.
)..
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 1182
of 2008.
From the Judgment and Order dated 19.10.2005 of the
G High Court of judicature of Gujarat atAhmedabad in Tax Appeal
No. 526 of 2003.
,,.,
P. Vishwanatha Shetty, T. Srinivasa Murthy, Gaurav Agrawal
and B.V. Balaram Das for the Appellant.
H
650
...
ASSISTANT COMMISSIONER OF INCOME TAX,
651,
AHMEDABAD v. ARVIND POLYCOT LTD. [KAPADIA, J.]
S. Ganesh, Amar Dave, Rustom B. Hathikhanawala, E.C.
A
Agrawala. J.P. Shah, Manish Shah, Harish J. Jhaveri, Pardiwala,
Jay Savla and Reena Bagga for the Respondent.
The Judgment of the Court was delivered by
KAPADIA, J. 1. Leave granted.
B
2. In this civil appeal filed by the Department the question
of law arises for determination which question is as follows:
"Whether interest paid in respect of borrowings on capital
assets not put to use in the concerned financial year can
1 c
be permitted as allowable deduction under Section
36(1 )(iii) of the Income-tax Act, 1961 ?"
3. Our answer to the above-mentioned question is squarely '
covered by our decision in favour of the assessee and against
the Department in the case of Dy. Commr. of Income Tax,
D
Ahmedabad v. Mis. Core Health Care Ltd. in Civil Appeal ,
Nos.3952-55 of 2002.
4. Accordingly the said question is answered in favour of
assessee and against the Department. Consequently the •
Department's civil appeal is dismissed with no order as to costs.
E
D.G.
Appeal dismissed.
1
Lex