2008 (8) TMI 313

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.... 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 the facts and in circumstances of the case, ....

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.... 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, the Tribunal took the view that these two ord....

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....y 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 must borrow capital and the purpose of the borro....

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....n 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 deduction under section 36(1) (iii) of the Act, the appe....