JT. COMMNR. OF INCOME TAX, GUJARAT vs UNITED PHOSPHOROUS LTD., GUJARAT

The Supreme Court addressed two legal questions regarding the Income-tax Act, 1961. It held that interest paid on borrowings for capital assets not put to use can be deducted under Section 36(1)(iii), aligning with its previous ruling in Dy. Commr. of Income Tax, Ahmedabad v. M/s. Core Health Care Ltd. The Court remanded the second question regarding the option to claim partial depreciation back to the High Court for reconsideration, noting the omission of Section 34(1) and the introduction of the block of assets concept, thus partly allowing the Department's appeal.