Commr.Of Income Tax-I,Ahmedabad vs M/S. Ashini Lease Finance P.Ltd

The Supreme Court addressed the issue of whether interest paid by the assessee to M/s. Torrent Financiers was allowable as expenditure under Section 36(1)(iii) of the Income Tax Act. The Court found that the High Court erred in dismissing the appeals without considering the potential circular trading aimed at tax evasion. Consequently, the Supreme Court set aside the High Court's judgment and restored the tax appeals for reconsideration, emphasizing the need to address substantial questions of law.