Interest on Unutilized Capital Assets Deductible under Income-tax Act

The SC held that interest paid on borrowings for capital assets not utilized in the financial year is an allowable deduction under Section 36(1)(iii) of the Income-tax Act, 1961. The Department's civil appeal was dismissed, upholding the ruling in favor of the assessee.

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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. The decision was based on a previous case in favor of the assessee. The Department's civil appeal was dismissed.

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