SHEW KISSEN BHATTAR vs THE COMMISSIONER OF INCOME TAX, CALCUTTA

The Supreme Court held that under Section 9(1)(iv) of the Indian Income Tax Act, 1922, the assessee is entitled to deduct only simple interest and not compound interest. The Court clarified that when interest is not paid, it becomes part of the principal, and the deduction is limited to the interest payable on the original capital charge. The interpretation that 'any interest' includes compound interest was rejected to prevent tax evasion, affirming the High Court's decision that only simple interest is allowable.