Interest on amount borrowed for buying machinery allowable despite non-actual use in business

CIT Vs Maharashtra Hybrid Seeds Co. Ltd. (Bombay High Court) The Bombay High Court allowed the deduction on interest paid on the amount borrowed for the purpose of machinery even if machinery is not actually used in business. The revenue has raised the issue Whether on the facts and circumstances of the case and in law, the ITAT was justified in allowing the deduction of interest when assessee, M/s. Maharashtra Hybrid Seeds Co. Ltd. failed the tests of interlacing and entering dependencies unity of control and management – conditions necessary for deduction u/s. 36(1)(iii). The Revenue’s s...