C.I.T., BARODA vs ISHWAR BHUVAN HOTELS LTD., BARODA

The Supreme Court addressed whether interest on borrowings for capital assets not utilized in the financial year is deductible under Section 36(1)(iii) of the Income-tax Act, 1961. The Court held that such interest is allowable as a deduction, aligning with its previous ruling in Dy. Commr. of Income Tax, Ahmedabad v. M/s. Core Health Care Ltd. The appeal by the Department was dismissed, affirming the position in favor of the assessee.