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CASE NO.: Appeal (civil)  1182 of 2008

PETITIONER: Assistant Commissioner of Income Tax,Ahmedabad

RESPONDENT: Arvind Polycot Ltd

DATE OF JUDGMENT: 08/02/2008

BENCH: S.H. Kapadia & B. Sudershan Reddy

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO 1182 OF 2008 [Arising out of S.L.P. (C) No.20771 of 2006]

KAPADIA, J.

Leave granted. 2.      In this civil appeal filed by the Department the question  of law arises for determination which question is as follows:  "Whether interest paid in respect of borrowings on  capital assets not put to use in the concerned  financial year can be permitted as allowable  deduction under Section 36(1)(iii) of the Income-tax  Act, 1961?"

3.      Our answer to the above-mentioned       question is squarely  covered by our decision in favour of the assessee and against  the Department in the case of Dy. Commr. of Income Tax,  Ahmedabad v. M/s. Core Health Care Ltd. in Civil Appeal  Nos.3952-55 of 2002.   

4.      Accordingly the said question is answered in favour of  assessee and against the Department.  Consequently the  Department’s civil appeal is dismissed with no order as to  costs.