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TAXAP/1965/2010 2/ 2 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 1965 of 2010
=========================================================
COMMISSIONER
OF INCOME TAX-I - Appellant(s)
Versus
GUJARAT
STATE FERTILIZERS AND CHEMICALS LIMITED - Opponent(s)
=========================================================
Appearance
:
MR
MR BHATT, SR. ADV WITH MRS MAUNA M BHATT
for
Appellant(s) : 1,
None for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI
Date
: 16/11/2011
ORAL
ORDER
(Per
: HONOURABLE MR.JUSTICE AKIL KURESHI)
Revenue
is in appeal against the judgment dated 8th August 2008,
raising following substantial question for our consideration:
“Whether,
on the facts and in the circumstances of the case, the Tribunal was
right in allowing the deduction claimed being interest paid u/s. 36
[1](iii) made on account of (i) the manufacturing of Caprolactum with
advanced technology, (ii) co-generation [Phase-III] Project and (iii)
Ammonia Expansion project, though the interest paid was capitalized
by the assessee in its books of account ?”
It
appears that the assessee had claimed deduction of interest on
borrowed funds though as per the accounts such interest was
capitalized. The Tribunal, however, accepted the assessee’s claim.
Hence this appeal.
Merely
because the assessee treated the interest payment for the accounts
purpose differently would not govern its treatment for the purpose
of income tax. Additionally, we also find that the issue of
deduction of interest under section 36(1)(iii) of the Income Tax
was considered by this Court in the case of DCIT v Core Health Care
Ltd., 298 ITR 194 and held the question in favour of the assessee.
That being the position, this Tax Appeal is dismissed.
(Akil
Kureshi J.)
(Ms.Sonia
Gokani, J.)
(vjn)
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