ASSTT. COMMNR. OF INCOME TAX, AHMEDABAD vs. ARVIND POLYCOT LTD

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C.A. No.-001182-001182 - 2008Supreme Court08 February 20081 pages
For Petitioner: B. V. BALARAM DAS
AI SummaryDismissed

What did the Supreme Court hold?

The Supreme Court held that interest paid on borrowings for capital assets not put to use in the concerned financial year is an allowable deduction. This decision was based on a prior ruling by the Court.

What were the facts?

The Department appealed a decision regarding the allowability of interest paid on borrowings for capital assets that were not yet put to use. The core issue was whether such interest could be deducted under Section 36(1)(iii) of the Income-tax Act, 1961.

What were the issues?

Whether interest paid on borrowings for capital assets not yet put to use is an allowable business expenditure under Section 36(1)(iii) of the Income-tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 36(1)(iii)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 1 CASE NO.: Appeal (civil) 1182 of 2008 PETITIONER: Assistant Commissioner of Income Tax,Ahmedabad RESPONDENT: Arvind Polycot Ltd DATE OF JUDGMENT: 08/02/2008 BENCH: S.H. Kapadia & B. Sudershan Reddy

JUDGMENT: J U D G M E N T CIVIL APPEAL NO 1182 OF 2008 [Arising out of S.L.P. (C) No.20771 of 2006] KAPADIA, J. Leave granted.

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 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, Ahmedabad v. M/s. 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.

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