Interest on Unused Capital Assets Deductible under Income-tax Act

The SC held that interest on borrowings for capital assets not utilized in the financial year is deductible under Section 36(1)(iii) of the Income-tax Act, 1961. The Department's appeal was rejected, and no costs were granted.

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The Supreme Court of India ruled that interest paid on borrowings for capital assets not put to use in the financial year is an allowable deduction under Section 36(1)(iii) of the Income-tax Act, 1961. This decision was based on a previous case in favor of the assessee. The Department's appeal was dismissed, and no costs were awarded.

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