COMMR.OF INCOME TAX-I,AHMEDABAD vs M/S. ASHINI LEASE FINANCE P.LTD.

The Supreme Court held that the High Court erred in dismissing the appeals regarding the deductibility of interest paid under Section 36(1)(iii) of the Income Tax Act. The Court found that the High Court failed to consider the potential circular trading aimed at tax evasion, which could affect the entitlement to the deduction. Consequently, the Court set aside the High Court's judgment and restored the tax appeals for reconsideration, emphasizing the need for a thorough examination of the facts.