Dismissing the appeal of the revenue the Court held that,Prior to 2003 ,interest on capital borrowed for the purpose of capital expenditure is deductible . Followed India Cements Ltd v CIT ( 1966) 60 ITR 52 (SC).( AY. 2000-01)
CIT v. Bharat Hotels Ltd ( 2019) 410 ITR 417 (Delhi) (HC)
S. 36(1)(iii) :Interest on borrowed capital – Capital or revenue -Prior to 2003 ,interest on capital borrowed for the purpose of capital expenditure is deductible .[ S.37(1)]