TMI Blog2016 (7) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... interest on the borrowed capital was deductible under Section 36(1)(iii). - Decided in favour of the assessee - TAX APPEAL NO. 169 of 2007 - - - Dated:- 28-6-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MRS MAUNA M BHATT, ADVOCATE FOR THE OPPONENT : MR BHARGAV HASURKAR, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with the impugned judgment and order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench C (hereinafter referred to as ITAT) dated 01.06.2006 in ITA No. 802/Ahd/2002 for the Assessment Year 1997-98, the revenue has preferred the present Tax Appeal for consideration of the following substantial question of law: W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with the cost of acquisition of the assets. She submitted that the CIT(A) as well as the Tribunal wrongly allowed the claim of the assessee as it is undisputed fact that the said interest was directly related to the acquisition of the asset and the same was not put to use and hence the same needs to be capitalized with the cost of acquisition of the asset. 4. Mr. Bhargav Hasurkar, learned Counsel appearing on behalf of the respondent has submitted that as such the issue involved in the present Tax Appeal is now not res integra in view of the decision of this Court in the case of Gujarat State Fertilizer and Chemicals Ltd. vs. Assistant Commissioner of Income Tax reported in [2009] 313 ITR 244 (Guj) wherein this Court has held as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be the result of using the capital which the assessee has borrowed. 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 deduction under Section 36(1)(iii) of the Act, the appeal of the appellant is required to be allowed. Mr.Manish Bhatt, learned Sr. Standing Counsel appearing for the Revenue cannot dispute the applicability of the ratio of the decision of the Hon'ble Supreme Court to the present case. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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