Tribunal held that only one unit commenced in the preceding year and the other unit was set up and commenced in the subsequent year. Accordingly, in view of proviso to section 36(1)(iii) of the Act, only those assets which were put to use in the current year, was operational in nature
and only to that extent interest on borrowed capital for
acquisition of assets was to be allowed as a deduction. (AY. 2005-06)
ACIT v. Pasadensa Foods Ltd. (2018) 163 DTR 243 /192 TTJ 645 (Delhi)(Trib.)
S. 36(1)(iii) : Interest on borrowed capital – Where capital was borrowed for acquisition of fixed assets and only a part of assets were put to use, then interest was to be allowed only to the extent the assets were operational during the current year