Interest on funds borrowed to purchase land forming part of inventory is allowable deduction U/s. 36(1)(iii)

CIT Vs. Aditya Prop con (P) Ltd. (Rajasthan High Court) The present case is of acquisition of land for its development in course of real estate activity of the assessee. Assessee is about to complete one project and to continue the activities has purchased another land to develop another project. The argument of the learned Departmental Representative that the proviso would apply to the assessee’s case cannot be accepted. We are of the considered opinion that the purchase of inventory is continuation of the same business activity in routine course and cannot be termed as extension of the bus...