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Interest on loan for acquisition of capital asset is deductible even if such asset not put to use in previous year
Case Law Details
- Case Name
- Vardhman Polytex Ltd. Vs Commissioner of Income-tax (Supreme Court of India)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Courts
- Supreme Court of India
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SUPREME COURT OF INDIA
Vardhman Polytex Ltd.
v/s.
Commissioner of Income-tax
Civil appeal nos. 6438 and 6443 of 2012
SEPTEMBER 12, 2012
ORDER
1. Heard learned counsel on both sides.
Leave granted.
The question which arises for determination in these civil appeals filed by the assessee is as follows:
“Whether interest paid in respect of borrowings for acquisition of 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?”
This question has been answered in favour of t...
In the context herein, though not of direct relevance to the limited point of issue, it is worthwhile to bear in mind the following:
The implications of section 36(1)(iii), which was being considered as almost a settled law, came to be relooked at in the aftetrmath of introduction of Section 14A with retrospective effect. However, according to a view, NOT WITHOUT SUBSTANCE, the lately ongoing controversy whether the said provision i.e. section 14A can be construed to modify or override in any manner the existing legal position under section 36 (1)(iii), especially if rw / in the light of the residuary provsion of section 37(1), is misconceived and not well founded.
For a critique, one may look up the published article – 14 CPT 819. Perhaps, that may help help in understanding in proper light all related issues arising under sectionb 36 (1 related