https://www.taxtmi.com/caselaws?id=767273 The HC held that the provision for Asset Reconstruction Cost (ARC) qualified as an ascertained liability under AS 29, rejecting the AO and Tribunal's view that only ascertained liabilities could be provisioned. The obligation to repair and restore was a present, probable, and measurable liability, not a contingent one. The assessee was entitled to claim the provision under Section 37 as well. Regarding Section 36(1)(iii), the court ruled that interest on borrowed capital is deductible if the capital is for business purposes, regardless of whether it is for extension or expansion of business. The Proviso excludes interest deduction only during the period before the asset is put to use. The matter was remanded to the AO to examine whether the cell sites were operational and whether a common pool of funds was used. Question C was resolved by SC precedent. en-us Tue, 11 Mar 2025 00:00:00 +0530 Mon, 04 Aug 2025 14:59:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=767273 The HC held that the provision for Asset Reconstruction Cost (ARC) qualified as an ascertained liability under AS 29, rejecting the AO and Tribunal's view that only ascertained liabilities could be provisioned. The obligation to repair and restore was a present, probable, and measurable liability, not a contingent one. The assessee was entitled to claim the provision under Section 37 as well. Regarding Section 36(1)(iii), the court ruled that interest on borrowed capital is deductible if the capital is for business purposes, regardless of whether it is for extension or expansion of business. The Proviso excludes interest deduction only during the period before the asset is put to use. The matter was remanded to the AO to examine whether the cell sites were operational and whether a common pool of funds was used. Question C was resolved by SC precedent. Case-Laws Income Tax Tue, 11 Mar 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=767273