C.L.T., BARODAversusISHWAR BHUVAN HOTELS LTD., BARODA

                                                                             ~
                             [2008] 2 S.C.R. 652

                                                                                  .J
A                             C.l.T., BARODA                                 .+,
                                      II.
             ISHWAR BHUVAN HOTELS LTD., BARODA
                 (Civil Appeal No. 2594 of 2006)
                           FEBRUARY 8, 2008
B
        [S.H. KAPADIA AND 8. SUDERSHAN REDDY, JJ.]
                                                                             -+
          Income Tax Act, 1961 ..... s. 36 (1) (iii)- Borrowing on capital   •
     assets not put to use in the concerned financial year- Interest
c    paid on - Whether can be permitted as allowable deduction
     under the provision - Held: Yes.
          Dy. Commnr. of Income Tax, Ahmedabad vs. Mis. Core
     Health Care Ltd. in Civil Appeal Nos. 3952-55 of 2002 decided
     by Supreme Court on 8.2.2008- relied on.
D
          CIVILAPPELLATE JURISDICTION : Civil Appeal No.2594
     of 2006.                                                                      A
                                                                                       . ;.
          From the final Judgment and Order dated 19.10.2005 of
     the High Court of Gujarat atAhmedabad in Tax Appeal No. 529/
E    2003.
          P. Vishwanatha Shetty, T. Srinivasa Murthy, Gaurav Agrawal
     and B.V. Balaram Das for the Appellant.
                                                                                              ''
          E.C. Agrawala for the Respondent.
F         The Judgment of the Court was delivered by
            KAPADIA, J. 1. In this civil appeal filed by the Department
      the question of law arises for determination which question is
    · as follows:
G         "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 ?"

H                                    652
 C.l.T., BARODA v. ISHWAR BHUVAN HOTELS LTD.,             653
              BARODA [KAPADIA, J.]

     2. Our answer to the above-mentioned question is squarely   A
covered by our decision in favour of the assessee and against
the Department in the case of Dy. Commr. of Income Tax,
Ahmedabad v. Mis. Core Health Care Ltd. in Civil Appeal
Nos.3952-55 of 2002.                                ·
      3. Accordingly the above question is answered in favour    B
of assessee and against the Department. Consequently the
Department's civil appeal is dismissed with no order as to
cost.
K.K.T.                                    Appeal dismissed.      c