2008 (8) TMI 313

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....espondent. JUDGMENT The judgment of the court was delivered by K. A. Puj J.- The appellant-assessee has filed this tax appeal under section 260A of the Income-tax Act, 1961, for the assessment year 1992-93. The appeal was admitted by this court on August 2, 2006, and the following substantial question of law was formulated for determination and consideration of this court. "Whether, on....

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....lass Industries Ltd. reported in [1976] 103 ITR 715. This court dismissed the Department's appeal therefrom on the point of deductibility of interest. For the assessment year 1991-92 also, the Tribunal allowed such interest and the Department accepted the said order by not preferring an appeal to this court against the said order. In the appeal for the assessment year 1992-93, filed by the Revenue....

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....reme Court in the same judgment, which is squarely applicable to the facts of the present case. The hon'ble Supreme Court in that case has held that section 36(1) (iii) of the Income-tax Act, 1961, has to be read on its own terms : it is a code by itself. It makes no distinction between money borrowed to acquire a capital asset or a revenue asset. All that the section requires is that the assessee....

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....rowed. Actual cost of an asset has no relevancy in relation to section 36(1) (iii) of the Act. Applying the ratio of the decision of the Supreme Court to the facts of the present case and considering that there is no dispute about the fact that the capital borrowed was used for the purpose of business and whether it is for the capital purpose or revenue purpose is immaterial while allowing deducti....