TMI Blog2013 (3) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal also held that no distinction can be made between the money borrowed for acquiring capital asset or revenue asset as Legislature has not made such distinction of use of capital on the basis of capital purpose or revenue purpose. - Decided in favor of assessee. - TAX APPEAL No. 355 of 2010 - - - Dated:- 25-1-2012 - MR. AKIL KURESHI AND MS SONIA GOKANI JJ. Appearance: MR MR BHATT, SR. ADV. with MRS MAUNA M BHATT for Appellant(s) : 1, MR MANISH J SHAH for Opponent(s): 1, ORAL ORDER (Per: HONOURABLE MS JUSTICE SONIA GOKANI) 1. Revenue has challenged the order of the Income Tax Appellate Tribunal ( the Tribunal for short) dated 25.4.2008 proposing following question of law for our consideration:- Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to be confined to the facts in the case of Challapalli Sugars Ltd.[1975] 98 ITR 167 (SC). It was a case where the company had not yet started production when it borrowed the amount in question. The more appropriate decision applicable to the present case would be the judgment of this court in the case of India Cements Ltd. v. CIT [1966] 60 ITR 52 in which it has been observed that, for considering whether payment of interest on borrowing is revenue expenditure or not, the purpose for which the borrowing is revenue expenditure or not, the purpose for which the borrowing is made irrelevant. In our view, section 36(1)(III)of the 1961 Act has to be read on its own terms. It is a code by itself. Section 36(1)(iii) is attracted when the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Core Health Care (supra) thus has recognized the assessee's entitlement of deduction of interest under Section 36(1)(iii) for borrowed capital by holding that all that Section requires is that the assessee must utilize such amount for the purpose of business which is carried on by the assessee in the accounting year and regardless of result of use of such capital. Based on ratio, Tribunal also held that no distinction can be made between the money borrowed for acquiring capital asset or revenue asset as Legislature has not made such distinction of use of capital on the basis of capital purpose or revenue purpose. 7. In the instant case as noted above also the claim of interest was disallowed by the Assessing Officer on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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