BHUNA COOP. SUGAR MILLS LTD. vs COMMNR. OF INCOME TAX, ROHTAK

The Supreme Court addressed the issue of interest deduction under Section 43B of the Income Tax Act, holding that the appellant, a cooperative sugar mill, was entitled to deduct interest payable on loans from banks other than financial institutions, contrary to the findings of the Income Tax Appellate Tribunal and the High Court. The Court emphasized that the Tribunal had incorrectly classified the loans as being from Haryana Financial Corporation, which led to the erroneous disallowance of the deduction. The Court set aside the orders of the lower authorities, allowing the appellant's claim for deduction of interest.