~
[2008] 2 S.C.R. 652
A
C.l.T., BARODA
.J
.+,
II.
ISHWAR BHUVAN HOTELS LTD., BARODA
(Civil Appeal No. 2594 of 2006)
B
FEBRUARY 8, 2008
[S.H. KAPADIA AND 8. SUDERSHAN REDDY, JJ.]
-+
Income Tax Act, 1961 ..... s. 36 (1) (iii)- Borrowing on capital
•
assets not put to use in the concerned financial year- Interest
c paid on - Whether can be permitted as allowable deduction
under the provision - Held: Yes.
Dy. Commnr. of Income Tax, Ahmedabad vs. Mis. Core
Health Care Ltd. in Civil Appeal Nos. 3952-55 of 2002 decided
by Supreme Court on 8.2.2008- relied on.
D
CIVILAPPELLATE JURISDICTION : Civil Appeal No.2594
of 2006.
A
From the final Judgment and Order dated 19.10.2005 of
. ;.
the High Court of Gujarat atAhmedabad in Tax Appeal No. 529/
E 2003.
P. Vishwanatha Shetty, T. Srinivasa Murthy, Gaurav Agrawal
and B.V. Balaram Das for the Appellant.
' '
E.C. Agrawala for the Respondent.
F
The Judgment of the Court was delivered by
KAPADIA, J. 1. In this civil appeal filed by the Department
the question of law arises for determination which question is
· as follows:
G
"Whether interest paid in respect of borrowings on capital
assets not put to use in the concerned financial year can
)-
be permitted as allowable deduction under Section
36(1 )(iii) of the Income-tax Act, 1961 ?"
H
652
C.l.T., BARODA v. ISHWAR BHUVAN HOTELS LTD.,
653
BARODA [KAPADIA, J.]
2. Our answer to the above-mentioned question is squarely
A
covered by our decision in favour of the assessee and against
the Department in the case of Dy. Commr. of Income Tax,
Ahmedabad v. Mis. Core Health Care Ltd. in Civil Appeal
Nos.3952-55 of 2002.
·
3. Accordingly the above question is answered in favour
B
of assessee and against the Department. Consequently the
Department's civil appeal is dismissed with no order as to
cost.
K.K.T.
Appeal dismissed. c
Lex