DEPUTY COMMISSIONER OF INCOME TAX vs M/S. CORE HEALTH CARE LTD.

The Supreme Court addressed the issue of whether interest on borrowings for capital assets not put to use can be deducted under Section 36(1)(iii) of the Income-tax Act, 1961. The Court held that such interest is allowable as a deduction, emphasizing that the provisions of Section 36(1)(iii) should not be overridden by Explanation 8 to Section 43(1), which pertains to actual cost. The Court affirmed the decisions of the lower authorities, thereby dismissing the Department's appeals.