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2003 (1) TMI 67 - HC - Income Tax"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the interest on borrowed capital to the extent it was invested in immovable properties in question was not allowable as business expenditure under section 36(1)(iii)/37(1) of the Income-tax Act, and whether the finding of the Tribunal is perverse ?" - we find that the order of the learned Tribunal suffers from perversity, inasmuch as no reasonable person could have drawn an inference on the facts that this is not a case which could be covered under section 36(1)(iii). Therefore, in view of the decision in CIT v. Associated Fibre and Rubber Industries P. Ltd., the interest paid on the borrowed capital is liable for deduction under section 36(1)(iii) of the 1961 Act. - we allow this appeal and set aside the order of the learned Tribunal. The first part of the question is answered in the negative in favour of the assessee and the second part is answered in affirmative in favour of the assessee.
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