2003 (7) TMI 21

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....mited controversy before this court is whether the Tribunal was justified in allowing the interest amounting to Rs. 18,56,32,417 as revenue expenditure, on the funds borrowed to the tune of Rs. 220 crores? The case of the respondent-assessee before the Assessing Officer was that the interest paid on the capital borrowed for expansion of business is allowable under section 36(1)(iii) of the Act.....

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....e parties. Learned counsel for the appellant submits that in view of a proviso to clause (iii) of sub-section (1) of section 36 of the Act, the interest paid on the borrowings for expansion of business should not be allowable, unless it is put in use. Mr. Kothari, learned counsel for the respondent submits that the aforesaid proviso has no application in the present case, as it has been made ef....