TMI Blog2008 (8) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... 6(1) (iii) emphasises the user of the capital and not the user of the asset which comes into existence as a result of the borrowed capital. The Legislature has, therefore, made no distinction in section 36(1) (iii) between capital borrowed for a revenue purpose and capital borrowed for a capital purpose - Actual cost of an asset has no relevancy in relation to section 36(1) (iii) of the Act – tribunal order disallowed the claim of interest not correct – interest is allowable – appeal allowed. - 945 of 2006 - - - Dated:- 22-8-2008 - K. A. PUJ and BANKIM N. MEHTA JJ. J. P. Shah and Manish J. Shah for the appellant. Manish R. Bhatt for the respondent. JUDGMENT The judgment of the court was delivered by K. A. Puj J. - The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Revenue, the Tribunal took the view that these two orders of the Tribunal on identical facts were per incuriam and likewise, the two decisions of this court in CIT v. Alembic Glass Industries Ltd. reported in [1976] 103 ITR 715 and Deputy CIT v. Core Health Care Ltd. reported in [2001] 251 ITR 61. Being aggrieved and dissatisfied with the order dated May 12, 2006, the appellant preferred the above tax appeal before this court under section 260A of the Income-tax Act, 1961. 3. Mr. J. P. Shah, learned counsel appearing for the petitioner has submitted that the issue is squarely concluded by the decision of the hon'ble Supreme Court in the case of Deputy CIT v. Core Health Care Ltd. reported in [2008] 298 ITR 194 (SC). H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. 4. Mr. Manish Bhatt, learned senior 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. 5. Considering the facts of the present case and the decision of the hon'ble Supreme Court, we are of the view that the Tribunal was not right in law in disallowing the interest of Rs. 27,96,95,759 paid in respect of capital borrowed for the purpose of its business being the se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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